Home' Trinidad and Tobago Guardian : April 6th 2014 Contents APRIL 2014 • WEEK ONE www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG15
Angostura Holdings Ltd con-
tinues to grow its non-alco-
hol business while it benefits
from special one-off trans-
actions, which are mainly
attributable to the unwind-
ing and rationalisation of the former CL Finan-
Let us see what elements comprised its strong
performance in 2013.
Assets growth and profile
Total assets declined from $1.05 billion as
at December 2012 to $915 million. The most
significant contributor to this change was the
sale of its 28.91 per cent stake in the Scottish
distiller, Burns Stewart Distillers Ltd. This sale
removed assets of $245.5 million from its books
and, as we shall see later, contributed $83.8
million in pre-tax profits to AHL.
The value of property, plant and equipment
increased to $321 million from $274 million as
at year-end 2012. Here, the most significant
change occurred under the "assets in progress"
column, which increased from a restated 2012
figure of $40.1 million to $80.6 million as at
Also increasing was the retirement benefit
asset, which was valued at $53.55 million as
at December 2013; this compares with a $2
million value as at year-end 2012. This change
was largely due to the adoption of the IAS 19
accounting standard for defined benefit pension
Trade and other receivables increased from
$162.2 million as at December 2012 to $197.3
million. Most of this increase is reflected in
the sums that are less than 30 days old, which
is consistent with higher sales in the last few
weeks of the year.
Cash and equivalents were $148 million
from the $164.8 million recorded as at Decem-
The company used some of its own
resources together with the $331 odd million
from the April 2013 sale of Burns Stewart to
reduce its debt load.
Total liabilities contracted by a far more
spectacular degree to close 2013 at a modest
$266.4 million; this balance was almost $418
million lower than the 2012 level of $684.3
AHL eliminated $469.5 million of its long-
term borrowings bringing its balance down to
zero. The main debts eliminated were a Euro-
denominated loan of $227.9 million, a US dol-
lar-denominated debt of $97.5 million with
the remainder being denominated in TT dollars.
At the same time, it judiciously increased its
short-term debt to $110 million from $50.3
million as at year-end 2012.
Trade and other payables also declined to
$110 million from the previous period s $134.6
million. Meanwhile, its deferred tax liability
increased from $29 million in 2012 to $46.3
million last year.
The principal beneficiary of these asset and
liability movements was shareholders equity.
Driven almost entirely by the increase in
retained earnings, the value of this item jumped
to $648.5 million from the 2012 base of $366.8
Based on that change, the book value of
each share moved up to $3.15 from $1.78 as
at December 2012.
Income and profit
Total revenues rose by a modest 2.3 per cent
to $663.2 million from the 2012 figure of $648.3
million. More importantly, the cost of goods
sold declined by $9.3 million to come in at
$263.3 million from the 2012 figure of $272.7
million. These changes allowed AHL to report
a gross profit of $399.9 million; this amount
was 6.5 per cent greater than the $375.6 million
earned in 2012.
Both selling and marketing expenses and
administrative expenses exhibited increases.
In the case of the former, expenses increased
to $124.2 million from the earlier base of $113.6
million. In the case of the latter, the 2013 figure
came in at $70.6 million versus $64.5 million
for 2012. These changes saw operating profit
for last year register at $205.1 million; this
was 3.9 per cent greater than the $197.5 million
earned in 2012.
Consistent with its aggressive debt reduction
programme, net finance costs declined to $9
million from the 2012 level of $29.3 million.
These changes helped push profit from con-
tinuing operations up to $196.1 million from
the prior period s $168.2 million, representing
an improvement of 16.5 per cent.
We now come to the three special events
that collectively contributed $149.3 million to
its pre-tax result. First, the settlement of its
Euro denominated debt gave rise to a $17.7
million profit on foreign exchange gains. An
additional $3.3 million was recorded with
respect to other foreign exchange gains.
The same settlement of the Euro debt also
gave rise to a gain on the settlement of this
financial liability amounting to $44.45 mil-
The final portion of these special transactions
was the sale of its stake in Burns Stewart Dis-
tillers Ltd for consideration of $331 million;
this sale gave rise to a profit on disposal of
Also, for the period of slightly more than
three months (before the sale in April) that
AHL held shares in Burns Stewart its share
of profits, net of tax, amounted to $3.1 million;
this figure is shown as an additional one-off
The net effect of all these changes saw AHL
report a pre-tax profit of $350.7 million, which
was 42.7 per cent greater than the $245.7 mil-
lion recorded for 2012. The effective tax rate
increased slightly from 19 per cent in 2012 to
21.4 per cent last year.
At the after--tax level, the company reported
a net profit of $275.7 million compared with
the $201.5 million attained in 2012.
AHL structures its business along two major
segments, alcohol and non-alcohol. The alcohol
segment includes both bulk and cased rum,
the former being less profitable than the latter.
It probably also includes the sale of alcohol
products that are not produced by the com-
pany, for example, imported wines.
In addition, it does not disclose what portion
of its sales is exported and what is local. The
last occasion that this information was reported
was back in 2010. In that year, Angostura had
total sales of $620.9 million. Of this sum, 92.8
per cent or $576.2 million was described as
being "local" while $44.7 million (7.2 per cent)
was described as "overseas."
These figures show that the total operating
profit has remained essentially stagnant over
the period shown. The only bright spot seems
to be the increases in sales and profitability
for the non-alcohol segment. The growth in
this segment was probably fuelled by increased
sales of Angostura bitters and its variants.
Adjusted earnings and share price
If we exclude the special transactions referred
to earlier, we could eliminate almost $114.3
million in after-tax profit for 2013. This would
bring its "core" profit down to an after-tax
figure of $161.4 million. This translates into
EPS of $0.78. This differs from the actual
reported EPS of $1.34.
Last year, the price of AHL peaked at$13.50
on October 25, 2013. The share was recently
quoted at an ex-dividend price of $11.00.
The dividend paid for 2013 amounted to
$0.24, including a $0.04 cents "special div-
idend". At its recent price of $11.00, this gives
investors a yield of 2.18 per cent.
Over the past few years Angostura s results
have been bolstered by a series of assets sales,
including Lascelles de Mercado and Burns
Stewart, debt reductions and recoveries from
Clico. The major outstanding item is the recov-
ery of a debt of $984.6 million from its parent
company, CL Financial.
As at December 2013, all of AHL s borrow-
ings of $110 million were unsecured. In addi-
tion, it had $148 million in cash and equivalents.
Now operating essentially without any debt,
what will the company do when it receives
the funds from CL Financial?
The question many investors ask is: what s
next for AHL?
Is an acquisition in the pipeline?
Or, is the company content to operate as a
dominant player on the local scene?
With so much cash in its treasury, the com-
pany is an increasingly attractive target for
Perhaps, the company see its future as part
of an international entity with its minority
shares remaining listed on the local exchange?
Let us see how the year unfolds...
Angostura Holdings Ltd results:
Strong performance in 2013
Over the past few years Angostura's results have been bolstered by a series of assets sales, including
Lascelles de Mercado and Burns Stewart, debt reductions and recoveries from Clico. The major outstanding
item is the recovery of a debt of $984.6 million from its parent company, CL Financial.
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