Home' Trinidad and Tobago Guardian : October 12th 2014 Contents OCTOBER 12 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
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or the nine months ended June
2014, Barbados-based conglom-
erate Goddard Enterprises Ltd
(GEL) had revenues of B$715.3
million; this was almost 1 per
cent lower than the B$720.9
million reported for the same period in 2013.
Despite this top-line challenge, profit attrib-
utable to shareholders, at B$23.6 million, were
94.3 per cent greater than the B$12.1 million
earned in the comparative 2013 reporting peri-
The bulk of the year-on-year improvement
occurred in the first quarter to December 2013.
The most recent quarter to June 2014 also pro-
vided a useful boost to the bottom line.
The company operates three main divisions:
catering and ground handling; manufacturing
and services; and import, distribution and mar-
Its catering and ground handling businesses,
many of which are minority-owned, are a sig-
nificant and reliable source of profits and foreign
First Quarter comments
The increase in gross margins during this
quarter was attributed to a change in the mix
of contributions from its major divisions. In
particular, the import distribution division,
which have lower margins, contributed less
revenue during this period.
In its 2013 Annual Report, GEL sated that,
on December 6, 2013, the company repurchased
1,950,095 of its own common shares. On can-
cellation of these shares, the company’s issued
and outstanding share capital will be 58,174,594
This repurchase was financed with debt,
which contributed to the spike in finance costs
observed in this period.
Second quarter comments
In this period, improvements in operational
efficiencies were identified as the main con-
tributor to the better margins delivered. In addi-
tion, restructuring exercises in both St Lucia
and Barbados have begun to bear fruit.
One-off items also helped the overall result.
These included a gain on the sale of property
and equipment in St Lucia and higher income
from the rental of office space at their new
Haggatt Hall headquarters building, which is
now fully tenanted.
GEL’s share of income from it associates fell
by 36 per cent during the first six months.
Lower income was recorded at Sagicor General
Insurance Inc, Globe Finance Inc and National
Rums of Jamaica Ltd.
The continuing unsettling situation in
Venezuela triggered adverse consequences that
were reflected in the statement of comprehensive
income. Essentially, asset values were converted
at 49.81 Bolivars to US$1.00; in the 2013 period,
the conversion rate was 6.30 Bolivars to US$1.
Resulting from this devaluation, GEL incurred
a translation loss of B$6.7 million.
Third quarter comments
Continuing with the Venezuelan situation,
the Bolivar was now quoted at 50 Bolivars to
US$1.00. Consequently, the translation loss
attributable to GEL worsened to B$8.2 million
from the B$6.7 million recorded as at the end
of the second quarter. This figure is included
under the statement of comprehensive income.
Three items contributed to the decline in
revenues both during this quarter and for the
nine-month period. Operations in Venezuela
were impacted by the lower exchange rate. In
addition, the supermarket business, which was
sold in 2013, no longer made a contribution.
Finally, the distribution business in St Lucia
delivered lower revenues.
Higher margins and better control of selling
and administrative expenses contributed to
Year-end comments and dividend
In February 2014, a final dividend of B$0.08
was paid, bringing the total for the 2013 year
to B$0.14. Then, in August 2014, GEL paid an
interim dividend of B$0.06, which was
unchanged from the previous year.
With its 2014 fiscal period now closed and
on the basis of the results achieved to date,
shareholders can reasonably look forward to
an improved final dividend payment in February
results recover in
the second quarter
After a disappointing first quarter, ANSA
McAL Ltd’ results rebounded in the second
quarter, both in terms of sales and segment
First quarter comments
In the first quarter, third-party sales were
$24 million lower than in the comparative 2013
The most significant change was noted under
the automotive, trading and distribution seg-
ment, where the shortfall was $25 million. A
further $9 million deficit occurred in the media,
services and parent segment. $10 million in
higher revenues in the insurance and finance
sector helped mitigate the declines.
At the pre-tax profit level, insurance and
financial services recorded the greatest decline;
this division’s profit contracted to $32 million
from the $61 million earned in the first quarter
of 2013. This result was largely attributable to
unrealised losses in share values on both the
local and international equity markets.
The $2 million profit reduction at the auto-
motive, trading and distribution segment was
partly due to restructuring costs in both Trinidad
Also exhibiting a negative movement was
the media, services and parent segment, where
profits contracted by $11 million, or more than
35 per cent from the previous year’s $31 mil-
In the first quarter, Guardian Media Ltd
adopted a very conservative policy by fully
expensing in that period the entire cost of
acquiring the (television and radio) cricket rights
for the West Indies home series for the next
Q2 and year-to-date comments
In the second quarter to June 2014, all seg-
ments delivered higher profits, when compared
to the same period in 2013. In terms of revenues,
only the media, services and parent division
exhibited lower values.
After including the contributions from the
second quarter, total sales for the six-month
period were only $5 million ahead of the half-
year to June 2013, while pre-tax profits from
the operating divisions were a modest $9 million
(2.2 per cent) greater than the earlier period.
Even with $20 million fewer sales, the profits
at the automotive, trading and distribution seg-
ment were now $7 million greater than the $91
million earned for the first half of 2013.
Pre-tax profits at the insurance and finance
segment came in at $62 million for the second
quarter; this result brought the year-to-date
figure to within $5 million of the $99 million
earned for the 2013 half-year.
Despite exhibiting a half-year sales deficit of
$22 million, profit at the media, services and
parent division were only $1 million less than
the $36 million generated for the six months
ended June 2013.
Overall results and outlook
The total results for the first half of 2014
were helped by lower finance costs, which
declined from $23.8 million in the first six
months of 2013 to $21.4 million in the current
Additionally, the results of associates and
joint ventures improved slightly to $10.55 million
from $10.44 million earned in the 2013 peri-
These changes helped AMCL deliver an
improved profit attributable to shareholders of
$274.3 million from the $267 million recorded
for the 2013 half-year.
This result translated into EPS of $1.59 from
$1.55 for the same period in 2013. AMCL will
maintain its interim dividend at $0.30, which
will be paid on November 7, 2014.
At the recent price of $66.19, annualised EPS
of $4.35 and expected annual dividend of $1.30,
the share’s P/E multiple is 15.2 and its dividend
yield is 1.96 per cent.
Investors now await the release of the group’s
third quarter results to September, which are
expected in mid-November, so that they can
better gauge the company’s prospects for the
remainder of the year.
This will be the first opportunity to assess
the initial effects of the group’s combined AGM
and Expo, which was held on July 5, 2014 at
the Hyatt Regency hotel.
Despite lower revenues,
GEL improves its profitability
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