Home' Trinidad and Tobago Guardian : January 26th 2017 Contents JANUARY 26 • 2017 guardian.co.tt BUSINESS GUARDIAN
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Goddard Enterprises Ltd 2016 results
Barbados-based Goddard Enter-
prises LTD (GEL) continues to
keep focussed on its well-diver-
sified catering and ground han-
dling business, a large portion
of which are held in partnership
with local companies.
GEL is also a 50-per cent partner with Agos-
tini's Ltd in Caribbean Distributions Partners
Let us now review GEL's results for the year
ended September 2016.
Revenues and profits
Total revenues fell to B$767.5 million from
B$924.5 million or by 17 per cent. This decline
was influenced by the transfer of six subsid-
iaries to CDPL. In addition, OD Brisbane and
Sons (Trading) Ltd in St Kitts and Hutchinson
(Antigua) Ltd were sold.
On November 1, 2015, a 51 per cent owned
subsidiary acquired 100 per cent of the Co-
lumbian company, Ibero Caribe for B$7.13
million; this transaction resulted in goodwill
of B$1.3 million.
The cost of sales also contracted to B$425.9
million from B$574.6 million. This resulted in a
gross profit of B$341.5 million versus B$349.9
million in 2015.
However, selling, marketing and admin-
istrative expenses closed at B$281.8 million
from B$297.8 million. Although lower than the
previous year, it was influenced by transfers
Underwriting income fell to B$2.71 million
from B$3.18 million; this was prompted by the
more competitive environment.
These movements saw profit from opera-
tions improve to B$62.4 million from B$55.3
However, other net gains contracted to
B$15.4 million from B$26.8 million. In 2015,
the initial formation of CDPL generated a one-
off gain of B$20.8 million.
In 2016, GEL benefitted from gains on the
disposal of financial investments (B$7.2 mil-
lion), an insurance refund of B$2 million as well
as increased rental income of B$1.8 million,
among other factors.
These changes resulted in profit from op-
erations registering at B$77.7 million (2015:
Finance costs declined to B$10.6 million
from B$11.9 million. Meanwhile, its share of
profit from its associates increased to B$4.04
million from B$3.29 million; this improvement
was helped by a B$1.1 million contribution from
CDPL. Consequently, the pre-tax profit closed
at B$71.1 million from B$73.5 million.
Its effective tax rate increased to 20.6 per
cent from 15.8 per cent, moving from B$11.6
million to B$14.7 million. Contributing to this
higher rate were B$7.9 million less income not
subject to tax and almost B$6.5 million higher
taxes with respect to other jurisdictions.
The after-tax income registered at B$56.5
million from B$61.9 million. After allocating
to minority interests, the profit attributable to
shareholders came in at B$37.8 million versus
These results translated to diluted EPS of
B$0.64 compared with B$0.81 for 2015.
Changes in financial position
Total assets rose by one per cent to B$905.4
million from B$896.7 million.
Long-term assets ended at B$554.1 million
from B$547.3 million. The largest component,
property, plant and equipment closed at B$306
million from B$320 million. Disposals of B$8
million and transfers to investment property
of B$11 million helped drive this decline.
Investments in associated companies de-
clined to B$123.7 million from B$126.9 million.
The principal movement was under its 45 per
cent owned Sagicor General Insurance, which
carrying value fell to B$32 million from B$36.5
million. That company's dividend payment of
B$4.5 million exceeded its current period's
profit of B$629,000.
Financial investments rose to B$47.3 mil-
lion from B$37.6 million. All categories of in-
vestments increased. For example, St Lucia
Government bonds advanced to B$6.4 million
from B$3.8 million while its shares in Mirexus
Biotechnologies Inc rose to B$7 million from
Long-term trade and other receivables ad-
vanced to B$7.7 million from B$0.8 million. In
total, net trade and other receivables declined
to B$86.3 million from B$102.5 million. The
largest movement was shown under other re-
ceivables, which gross value declined to B$21.2
million from B$43 million.
Current assets increased to B$351.3 million
from B$349.5 million.
Notably, inventories declined to B$115.5 mil-
lion from B$121.2 million.; this is consistent
with the transfer of companies to CDPL.
On the other hand, cash rose to B$101.3
million from B$70.2 million. The largest im-
provement was shown under cash generated
from operations, which climbed to B$109.1
million from B$26.4 million. Contributing to
this positive swing was the decrease in trade
and other receivables of B$22.7 million, a fall
in sums due by associated companies of B$8.7
million along with a B$5.3 million increase in
trade and other payables.
Amounts due by associated companies de-
clined to B$25.3 million from B$34 million. Of
this total, B$16.7 million attracts no interest.
The remaining B$8.57 million carries an in-
terest rate of 5.5 per cent and it is repayable
over six years. Finally, prepaid expenses rose
from B$13 million to B$18.6 million.
Total liabilities declined to B$306.7 million
from B$313.9 million.
Total borrowings fell to B$167.5 million from
B$180.8 million or by B$13.3 million. The cur-
rent portion declined to B$76.4 million from
B$95.1 million while the long-term portion
rose to B$91.1 million from B$85.6 million.
Included in the current portion is B$32.4
million of preference shares, which pay divi-
dends of 6.5 per cent, payable semi-annually.
These shares are denominated in US dollars
and are redeemable in 2023. They were issued
to partly finance the purchase of Minvielle &
Under current liabilities, trade and other
payables rose to B$107.6 million from B$101.4
million. The increase reflects accrued liabili-
ties, which rose to B$68.8 million from B$61.9
million. The trade payables component fell to
B$38.8 million from B$39.5 million.
Total equity rose from B$582.8 million to
B$598.7 million. Excluding non-controlling in-
terests of B$94.8 million, shareholders' equity
closed at B$503.9 million from B$487 million.
Retained earnings improved to B$387.8 mil-
lion from B$366.8 million. Here, net income
of B$37.8 million and other comprehensive
income of B$7.8 million boosted the brought
forward balance. Then the repurchase of com-
mon shares totalling B$12.3 million along with
dividends to shareholders of B$12.3 million
reduced the closing figure.
Other reserves fell to B$72.05 million from
B$75.6 million; this reflected other compre-
hensive loss of B$3.5 million.
Share capital declined to B$44 million
from B$44.63 million, which reflected the
contraction in the number of issued shares
to 56,394,670 from 58,339,306. During the
year, 2,117,394 shares were repurchased at
B$6.60 each. Also, new shares totalling 172,758
shares were issued; this included both share
options exercised and shares sold to employees
at preferred prices.
Using the year-end balance of 56,394,670
shares in issue, the book value of each share
was B$8.94. At year-end 2015 the number of
issued shares was 58,339,306; at that time,
the book value was B$8.35.
Although based in Barbados, GEL derives
only 25 per cent (B$190 million) of its external
revenues from that country. Its second largest
revenue stream of B$144.5 million comes from
other territories and accounted for almost 19
per cent of total 2016 revenues. Other Car-
ibbean countries, including T&T, accounted
for 18.3 per cent of revenues and contributed
B$140.1 million in revenues while the Latin
American countries generated B$120.8 million
or 15.7 per cent of the total.
(With this diverse income stream, one would
expect GEL to have relatively few foreign ex-
change problems. This was likely to have been
one of the attractions for Agostini's Ltd to
partner with it to form CDPL.)
Although the catering and ground handling
division recorded a 17 per cent sales increase
it delivered a robust 46 per cent profit im-
provement. Its core operating profit rose by
almost 25 per cent and was further boosted
by net other gains of B$8.6 million.
This division operates in 21 jurisdictions
across the Caribbean and Latin America. The
Venezuelan results are now converted at Bo-
livars 658.89 to US$1.00 versus the previous
rate of Bolivars 199.42 to US$1.00. Signifi-
cant attention is being paid to energy costs
and the group is investing in PV (photo voltaic)
systems. The Trinidad associated companies
include Katerserv, Allied Caterers and Tobago
The automotive, building supplies and
service division delivered a 38 per cent im-
provement in pre-tax profit. This result was
helped by a B$1.2 million fall in finance costs.
Courtesy Garage in Barbados and Fidelity Mo-
tors in Jamaica recorded strong results. Joint
purchasing and operating synergies helped its
building supplies companies in both St Lucia
(M&C Home Depot) and St Vincent and the
Grenadines (Coreas Hazells Inc). Its pharmacy
operations also delivered strong results.
Despite lower revenues the manufacturing
and services division delivered higher profits.
This result was driven by improved operation-
al efficiencies and the stabilisation of energy
and raw material costs. The new label printing
operation in Jamaica exceeded sales and profit
Its bakery section added cassava bread and
cakes to their line of products. The poultry
section also achieved some notable success.
However, the rum company continued to fight
an uphill battle in the subsidised USA market.
After year-end, an agreement was signed to sell
both West Indies Rum Distillery (92 per cent
owned) and its 31 per cent stake in National
Rums of Jamaica.
The financial services division experienced a
60.2 per cent decline in pre-tax profit. At Sag-
icor General competitive pressures saw pre-
tax profit fall to B$0.63 million from B$2.78
million. Additionally, Bridgetown Cruise Ter-
minals experienced a 14.3 per cent decline in
pre-tax profits to B$1.5 million.
The CDPL division reported a small profit,
but has not yet achieved its full potential. Hand
Arnold Trinidad Ltd delivered strong results.
Additional commentary will be made next
week, when we review CDPL's senior partner,
Dividends and share price
Total dividends increased to B$0.22 from
2015's B$0.20. Over the one-year period GEL's
share price rose from B$6.58 to B$8.30 as at
September 2016. The price recently closed at
B$9.08. At that price, the yield is 2.42 per cent
and the P/E multiple is 13.99.
In addition to the sale of its rum properties,
GEL and Agostini's Ltd, via CDPL, purchased
Trinidad-based companies, Vemco Ltd and
Pepsi-Cola Trinidad Bottling Company Ltd.
These new companies are in the process of
being integrated into the CDPL structure.
In the next article, we will review Agostini's Ltd
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