Home' Trinidad and Tobago Guardian : February 22nd 2015 Contents FEBRUARY 22 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
Enterprises Ltd (GEL) could
be described as one of the
relatively few Caribbean
enterprises whose opera-
tions span most of the
Caribbean islands, as well
as Central and South America.
Despite a less than one per cent decline in
2014 revenues, profit from operations improved
by almost three per cent.
While Trinidad-based companies may fret
about the possible negative fallout from lower
energy prices, the reverse is true for most of
our Caribbean neighbours.
Let us now delve a little further into this
group s 2014 results for its fiscal period ended
September 30, 2014.
Stable assets base
At B$565.3 million, net assets employed were
stable for both years. However, working capital
improved to B$140.5 million from the previous
year s B$119.7 million. In the main, this
enhanced operating position reflected higher
cash balances and lower debt.
Cash balances rose to B$74.4 million from
the 2013 figure of B$65.3 million. Its most
notable concentration of cash was held with
CIBC First Caribbean. On the other hand,
funds held with the Venezuelan bank, Banesco
Banco Universal CA, almost evaporated as it
contracted to B$231k from the previous year s
level of B$12.1 million.
This change was facilitated by the Venezuelan
government s introduction of the SICAD 11
mechanism; this development enabled the pur-
chase of US dollars at the rate of 50 Bolivars
to US$1.00 as opposed to the previous level
of 6.30 Bolivars to US$1.00. Excess funds at
the Venezuelan subsidiaries were repatriated
to the parent company.
Another effect of SICAD 11 was that GEL s
Venezuelan assets were restated to reflect the
sharply lower exchange rate; this action resulted
in a currency translation loss of B$16.1 million,
which is reflected in the statement of com-
Trade and other receivables were marginally
lower at B$111.3 million (2013: B$112.0 million)
while inventories showed a similar result moving
from 2013 s B$166 million to B$165.5 million.
Prepaid expenses rose to B$13.1 million from
the previous level of B$10.9 million.
Current borrowings fell to B$95.9 million
from the 2013 level of B$118.3 million. Within
this category, bank term loans declined to
B$31.8 million from B$39.6 million. Also show-
ing a healthy fall was banking overdraft balances,
which closed 2014 at B$23.9 million from B$37.1
million as at year-end 2013. Short term loans
fell from B$9.1 million to B$7.7 million.
Preference shares with a coupon of 6.5 per
cent and redeemable up to 2023 remained
stable at B$32.4 million. These shares were
issued to finance the purchase of Minvielle &
Chastanet Ltd and are denominated in US dol-
lars. They are classified as current because
holders have an option to convert into cash by
giving two months notice. Another option is
the conversion of 60 per cent into common
shares with the remainder paid in cash prior
The value of property, plant and equipment
increased marginally to B$355.6 million from
the previous year s B$353.6 million. In total,
non-current assets declined to B$540 million
from 2013 s B$545.7 million. Lower pension
assets and intangible assets accounted for most
of this decline.
Non-current liabilities rose to B$115.2 million
from almost B$100 million. Here, the main
increase was reflected in the value of long-
term borrowings, which closed 2014 at B$107.5
million from the previous level of B$90.6 mil-
Total equity was almost unchanged at B$565.3
million. Equity attributable to non-controlling
interests fell to B$103.6 million from B$111.8
million. More importantly, shareholders equity
improved to B$461.7 million from 2013 s level
of B$453.5 million.
The number of shares outstanding as at
September 2014 was 58,310,410. This was lower
than the 60,124,689 shares outstanding as at
the end of the previous year. This reduction
reflected the net effect of the repurchase of
1.95 million shares from Chasmin Investments
Ltd in December 2013 and the issue of almost
136 thousand new shares to employees under
These changes resulted in the book value of
each share increasing from B$7.54 in 2013 to
B$7.92 last September.
Income and profits
External revenues declined marginally to
B$954.1 million from the previous level of
B$962.6 million. Revenues sourced from Bar-
bados and other Caribbean subsidiaries reg-
istered increases while those from Latin America
declined. The Venezuelan operations accounted
for most of the decline in Latin America.
Helped by a proportionally greater reduction
in cost of sales, the gross profit came in at
B$356 million; this was 0.35 per cent lower
than 2013 s B$357.3 million.
Underwriting income, at B$4.1 million was
almost identical to the 2013 figure. Selling,
marketing and administrative expenses for
2014 came in at B$310 million; this was almost
B$2.68 million lower than the 2013 figure of
These changes helped GEL produce an oper-
ating profit of B$50.1 million, which was 2.98
per cent greater than the B$48.7 million record-
ed for 2013.
Notable contributions to this result came
from operations in Grenada, Cayman Islands
and St Lucia.
Income classified as other gains or losses
registered the biggest change for 2014. In 2013,
there was a hyperinflationary adjustment of
B$4.4 million combined with the impairment
of intangible assets of B$1.1 million, which
together negated positive contributions from
other sources. The total of other income for
that year was a negative B$2.23 million.
Now in 2014, other income generated a
robust total of B$14.58 million. The hyperin-
flationary adjustment fell to B$749k. More
importantly, rental income improved to B$6.14
million from 2013 s B$3.38 million. The primary
contributor to this increase was the higher
rental income from the recently completed
Haggerty Hall commercial building, where GEL
now houses its head office.
Useful contributions were also generated
from two one-off transactions. Gain on the
sale of subsidiaries produced B$5.24 million
in profit; this relates to the sale of contracts
and client portfolios in five territories by Min-
vielle & Chastanet Insurance Brokers Ltd. A
further B$3.3 million was garnered by Peter &
Company Ltd, which sold property at Choc
Estate, Castries, St Lucia.
These transactions helped GEL produce a
profit from operations of B$64.7 million; this
was 39.3 per cent higher than the B$46.4 mil-
lion reported for 2013. Finance costs, at B$12.3
million were slightly lower than 2013 s B$12.6
Contributions from its associated companies
fell to B$6.6 million from the B$9.8 million
recorded for 2013. Here, the main culprits were
Sagicor General Insurance and Globe Finance,
where a fraud was the major contributor to
2014 s loss.
Only, Barbados Cruise Terminals Inc per-
formed in line with projections.
These changes allowed GEL to report a pre-
tax profit of B$58.99 million versus B$43.61
million for 2013. Helped by much greater
income that was not subject to tax and higher
tax allowances, the 2014 taxation came in at
B$10.1 million; this was only B$412k higher
than 2013 s B$9.67 million.
These movements allowed GEL to report a
net profit of B$48.9 million (2013: B$33.93
million). Of this sum, B$36.4 million related
to equity-holders versus B$21.19 million for
2013. This result translated into diluted EPS
of B$0.61 (2013: B$0.35).
The decline in sales in the import, distri-
bution and marketing segment was largely
attributable to lower sales in the automotive
sector. On the other hand, this segment hugely
benefitted from the special one-off transactions
initiated by Peter & Company and Minvielle
& Chastanet Insurance Brokers.
These transactions, along with slightly lower
finance costs, helped this division deliver pre-
tax income of B$21 million, which compares
very favourably with the B$10 million achieved
The manufacturing and services segment
reported both higher sales and improved profits.
Favourable international conditions benefitted
the former while the latter was helped by lower
energy and raw material prices.
New subsidiaries in St Lucia and Jamaica,
established in the first quarter of the new fiscal
period, should benefit the current period s
Catering and ground handling services, which
is the most geographically diversified segment,
generated slightly lower revenues, but delivered
better pre-tax income.
The acquisition of an airport and industrial
catering company in Aruba, Calloway Corpo-
ration, in February 2014, contributed positively
to last year s results. On the other hand, the
economic challenges in Venezuela negatively
impacted this segment s performance.
GEL s share price was B$6.15 on January 2,
2014 and it closed last Monday at B$6.40.
Based on a 2014 dividend of B$0.20, this share
gives investors a yield of 3.1 per cent.
Unless core profitability improves dramat-
ically to compensate for the one-off transactions
generated in 2014, the EPS for 2015 is likely
to decline slightly. While this development
may not impact on the current dividend, it
might influence the share price.
If low energy prices persist for an extended
period, this will positively impact GEL s costs
and enhance its profits.
Goddard Enterprises Ltd 2014 results:
3% increase in profits
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