Home' Trinidad and Tobago Guardian : August 24th 2014 Contents The half-year results to June
2014 for the food and per-
sonal care companies reveal
some interesting shifts in
both sources of revenues and
Angostura Holdings Ltd
Sales for the six-month period were mar-
ginally lower than for the same period in
2013. This drop was primarily due to lower
revenues from its alcohol segment, which
came in at $228 million in the current period;
in the 2013 period, this figure was $245.3
An interesting highlight for this period
was the increase in non-alcohol sales, which
advanced by 34.3 per cent to almost $64
million from $47.6 million in the 2013 half-
year. Growth in existing markets combined
with expansion into new markets of Central
and South America were responsible for this
Operating profits, excluding finance costs,
from the non-alcohol segment rose to $31.1
million from $21.2 million in the comparative
2013 period. This segment accounted for 37.2
per cent of operating profits in 2014; in 2013,
this segment contributed 27.1 per cent to
The 2013 half-year results were positively
boosted by one-off transactions, such as the
sale of investments and gains on euro-
denominated debt at both the foreign cur-
rency and financial liability levels. Thus, we
can say that the results for the first half of
2014 primarily represent results from the
"normal" operations of the company.
Administrative expenses were $4.4 million
lower than for the first six months of 2013.
In addition, finance costs continued to fall,
moving to $1.7 million from the 2013 level
of $6.8 million. These reductions helped AHL
produce an improved result on its continuing
The company s investment in plant, prop-
erty and equipment increased from the
December 2013 level of $321.1 million to
$333.9 million as at June 30, 2014.
Assets held-for-sale primarily includes the
residual assets from the sale of Lascelles de
Mercado to Campari in December 2012. The
value of these assets declined to $1.4 million
from $3.6 million as at December 2013. Profit
on the sale of these assets and dividends
received prior to their sale are included under
the other income ($511k) and dividend income
Retained earnings were primarily boosted
by the current period s net profits of $60.4
million and reduced by a special and final
dividend of $33 million; these changes saw
shareholders equity close at $675.8 million.
With 205,820,000 shares outstanding, the
book value of each share is $3.28.
At the current price of $12.75, the price to
book multiple is 3.9 times. In addition, at a
projected core annual dividend of $0.25, the
current price gives investors a low yield of
1.96 per cent. What factor(s) could account
for this low yield and high price to book
At note 33 (IV) of the 2013 accounts, we
see that there is a provision for impairment
of receivables of $984.611 million. This sum
is owed to Angostura by its parent company,
CL Financial Ltd, which controls Rumpro
As part of the "final resolution" of the CL
Financial/Clico matter, there is an agree-
ment/understanding that this balance would
be repaid to AHL. Pending a resolution of
the MHTL valuation and sale, this is expected
to be another milestone transaction.
More likely than not, after AHL receives
these funds, it will pay a "special dividend"
of $4.71 per share. This could be done later
this year or early in 2015. In what could be
described as a "circular transaction", most
of this dividend will be paid to Rumpro/CLF
(45 per cent) and Clico (32.5 per cent),
although minority shareholders will also ben-
The current price of AHL seems to have
already factored in the eventuality or pos-
sibility of this payment.
Unilever Caribbean Ltd
In the second quarter, turnover improved
marginally by $846k or less than one per
cent to reach $148.15 million. Of some note,
net finance income rose to $5.4 million from
$1.53 million in the second quarter of 2013.
This change allowed UCL to report after-
tax income of $17 million for the April to
June quarter; this represents an improvement
of $2.66 million over the $14.37 million earned
for the same period in 2013. On a per share
basis, this showed an improved EPS of $0.65
from $0.55 in 2013 s second quarter.
For the full six-month period, sales were
up by one per cent, closing at $283.3 million.
Lower cost of sales helped gross profit
advance by 2.4 per cent to $112.8 million.
Increased promotional activity pushed up
selling and distribution cost to $60.1 million
from $57.6 million in the half-year to June
Administrative costs were $0.5 million
below the previous period s level. This factor
combined with higher margins and robust
finance income pushed the after-tax figure
to $30.83 million; this represented an
improvement of 12.6 per cent over the $27.4
million recorded for the 2013 half-year.
EPS improved to $1.17 from $1.04 in 2013.
An interim dividend of $0.32 was paid last
Although UCL indicated its intention to
increase its capital expenditure this year, at
the half-way mark only $1.57 million has
been spent thus far.
This figure is lower than the $1.72 million
spent in the first six months of 2013. Perhaps,
we will see an increase in this level in the
current and subsequent periods?
Flavorite Foods Ltd
Sales advanced by 5.5 per cent to reach
$82.42 million from the previous level of
$78.14 million. On the other hand, gross
expenses rose by 5.4 per cent, moving from
$76.84 million in the first half of 2013 to
$80.97 million in the current half-year.
Expense increases were concentrated in
production costs, advertising and marketing.
These changes allowed FFL to report a
pre-tax profit of $1.45 million, which was
11.8 per cent greater than the $1.3 million
recorded for the same period in 2013.
Effective tax rates declined to 40.6 per
cent from 49 per cent in the 2013 half-year.
Consequently, after-tax profit improved by
30.4 per cent to $862k from $661k. On a
per share level, this improvement saw half-
year 2014 EPS come in at $0.11 versus $0.08
for the comparative 2013 period.
In the second half of 2014, FFL expects
to close its loss-making St Lucia operations.
As yet, FFL does not report its results
along its major business lines, that is, ice
cream and meat processing and distribution.
Perhaps, in its next report, it will start to do
National Flour Mills Ltd
Similar to Angostura and Unilever, NFM
reported lower sales but higher gross profit.
In NFM s case, turnover for the six months
to June 2014 was $11.75 million lower than
the $224.89 million recorded for the first
half of 2013.
Cost of sales, however, came in at $174.5
million; this was $14.05 million lower than
for the same period in 2013. Consequently,
gross profit advanced to $38.6 million from
$36.3 million in the comparative reporting
Other operating income fell marginally to
$3 million from $3.2 million previously. Selling
and distribution costs were $920k lower than
in the first half of 2013. On the other hand,
administrative expenses increased to $16.1
million from the previous level of $13.2 mil-
lion. Finance costs continued to fall; the 2014
level was $4.15 million compared with $6.06
million incurred for the same period of 2013.
These changes saw pre-tax profits for the
current period register at $7.42 million com-
pared with $5.35 million for 2013 s half-year.
The effective tax rate declined from 12.6
per cent in 2013 to 8.5 per cent in the current
period. This change helped NFM report an
after-tax profit of $6.79 million; this repre-
sents an improvement of 45.2 per cent over
the $4.68 million earned for the first half of
2013. At a per share level, this translated into
an EPS of 5.65 cents versus 3.89 cents pre-
NFM anticipates favourable commodity
prices and improved operational efficiencies
will play a positive role in boosting its profits
during the second half of 2014. Improved
results and the prospect of lower commodity
prices have buoyed the share price, which
recently closed at $1.15.
Once again, the Eid and Emancipation hol-
idays in July and August saw the Government
instruct NFM to discount prices on many of
its products to consumers. As long as the
company eventually recovers the sums "lost,"
shareholders might not have a problem.
It could be argued, however, that, in the
context of lower grain and similar prices, the
Government was simply "pushing" the com-
pany to adjust its prices more quickly than
it would normally have been inclined to do.
Let s see how that plays out.
On this occasion, we note that its major
competitor, Nutrimix, has joined NFM in
reducing prices to consumers.
AUGUST 24 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG13
Food, personal care
firms report lower sales
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