Home' Trinidad and Tobago Guardian : January 9th 2014 Contents BG6 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt JANUARY 2014 • WEEK TWO
In a January 4 newspaper advertisement, Neal and Massy
Holdings Ltd (N&M) announced that the group acquired
Industrial Gases Ltd (IGL) and the St Lucia food chain,
Gablewoods Supermart Ltd.
Regarding IGL, the advertisement stated: "Prior to the acqui-
sition, Neal & Massy owned a 57.29 per cent stake in Neal &
Massy Gas Products Ltd (NMGPL)."
The notice of acquisition further stated: "NMGPL owns a
100 per cent stake in IGL and this acquisition now renders
IGL a fully-owned subsidiary of the Neal & Massy Group."
Revenue is expected to increase with the acquisition of IGL,
the advertisement said.
"Based on Neal & Massy s and IGL s results as at September
30, 2013, the group would have improved the earnings attrib-
utable to the owners of the parent by approximately $22.6
million and the group s earnings per share by approximately
Regarding Gablewoods Supermart Ltd, the advertisement
"On December 31, 2013, Neal & Massy entered into a sale
agreement with the shareholders of Gablewoods to acquire
100 per cent controlling interest through the acquisition of
63.3 per cent of Gablewoods share capital."
The purpose of the acquisition was "to increase N&M s
ownership in Gablewoods to a controlling interest. This initiative
permits N&M to expand its presence in food retail by acquiring
the leading supermarket chain in St Lucia."
The cost of the acquisition was not disclosed.
On Tuesday, The Business Guardian contacted N&M chair-
man Arthur Lok Jack for that information, but he referred all
such queries to N&M president and Group chief executive
officer Gervase Warner. In an e-mailed response, Warner said:
"That is confidential information that I cannot disclose."
The decision by N&M not to disclose the cost of the IGL
and Gablewoods Supermart transactions appears to contradict
Section 64 of the Securities Act 2012, which requires reporting
issuers to publish a notice "forthwith, and in any event within
seven days..." in two daily newspapers of general circulation
in T&T. The reporting issuer is required to "disclose the nature
and substance of the material change."
A material change is defined in the Securities Act 2012 as
"a change in the business, operations, assets or ownership of
an issuer, the disclosure of which would be considered important
to a reasonable investor in making an investment decision."
Significant capital expenditure
Despite a decrease in the cash position of Neal Massy (N&M)
Holdings Ltd and its subsidiaries from $1.3 billion to $1.1 billion,
chairman Arthur Lok Jack assured the company s balance
sheet remained "strong."
He said that for 2014, N&M has a strong "pipeline of acqui-
sition opportunities and at the same time is well-poised for
expansion in the future."
Lok Jack s comments come as N&M group released its
audited consolidated financial highlights for the year ended
September 30, 2013.
According to Lok Jack s statement, the decrease was due
to "significant capital expenditure" which was funded internally
in the company and not using any external source.
The group paid out a total dividend of $1.75 per share for
the period ended September 30, 2013, which represented 17
per cent increase compared to the previous year when $1.50
per share was paid out. Justifying the payout, Lok Jack said
the increase in dividend was in tandem with the increase in
earnings per share.
The group, which has local and regional operations, performed
well in all territories except in Jamaica. Commenting, Lok Jack
said, "The Jamaican economy is going through a rather difficult
time at the moment, so therefore, our companies over there
reflected that. However, steps have been taken to ensure that
we become more efficient in the year coming."
Regarding the sale of Almond Beach Village and Almond
Casuarina hotels, Lok Jack said: "The major drag on our
earnings for the past two years was the Almond hotels in Bar-
bados. These hotels have now been sold."
According to the financial highlights: "In December 2013,
after the end of financial year 2013, the sales of both Almond
Beach Village and Almond Casuarina hotels were closed. This
marks the end of the restructuring arising from the acquisitor
of BS&T and the fallout of the global financial crisis of 2009.
All properties having been sold, Almond Resorts Inc and
Casuarina Beach Club Ltd will be wound up and liquidated."
In December, reports indicated that public servant layoffs
in the Barbadian public sector could exceed 3,000 due to the
declining state of the economy. The state of the economy
prompted the International Monetary Fund (IMF) to conduct
a consultancy on the country to find out if it needed a bailout.
Reacting to the economic conditions in Barbados, and how
it would affect N&M s operations there, Lok Jack said: "I think
we ll hold our own in Barbados. I think obviously that Barbados
is going to go through a rough time. The main industry we
have is the supermarket industry, which is usually somewhat
insulated from economic problems. In other words, we re not
selling motor cars, we are selling food, people will always buy
food in recessionary times and good times."
Commenting on whether the retrenching of hundreds of
workers in Barbados would have an impact on N&M s oper-
ations, he said, "We don t think it will impact that much."
In e-mailed responses, president and group CEO Gervase
Warner said the group s Barbados operations contributes 27
per cent of N&M s profit and 30 per cent of revenue.
Commenting further about the dire Barbadian economy,
Warner said: "Given the austerity measures announced by the
Minister of Finance in Barbados, Neal & Massy is preparing
itself for lower consumer demand, but also expecting there
will be investment opportunities that will arise in the envi-
ronment as well.
"We believe the private sector has an important role to play
in leading investment for growth, especially when the gov-
ernment does not have the resources to do so. We are willing
and are doing our part (especially in the retail sector)."
The group s profit after tax from continuing operations grew
by more than 12 per cent to $611 million. Central and Latin
America are territories which the group is looking to invest
in for 2014, but Lok Jack did not want to give details on why
those territories were chosen. Overall, the food industry seemed
to be lucrative in most territories. In early December, the N&M
group opened T&T s first super combo Hi-Lo Food Stores in
La Romaine, employing 300 people.
Asked if the group was interested in acquiring Clico s insur-
ance portfolio, Warner said: " At the right price, yes, but not
Looking at the group revenue per territory
reported in the financial highlights:
According to the group Web site, other than T&T,
N&M has operations in:
N&M Group Jamaica Ltd (98% holding)
N&M Guyana (93% holding)
BCB Communications (51% holding)
N&M fails to disclose cost
of two acquisitions
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