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Financial News

Jul 2014 Financial News

Bright future for Ansa McAL

Jul 07, 2014

ANSA Mc Al Group Chief Operations Officer, Gerry Brooks, said the group has had a great year. Brooks is keenly optimistic about its future prospects in the country, region and hemisphere.

Speaking at the Group’s AGM/Expo at the Hyatt Regency Hotel Port-of-Spain Brooks said, “The expo really is an opportunity for shareholders to intimately touch and experience our brands. It’s an opportunity to see our sectors, what strategy is in place to grow our business, where our capex (capital expenditure) is being invested. We invested $369 million of capex in the last three years, some of it in the manufacturing sector in our new tyre plant; in the expansion of our chemical plant; in warehousing to support our distribution business; in our ERP system to support all our manufacturing, beverage and distribution businesses.” (Enterprise Resource Planning (ERP) is a management software to automate and integrate core business processes such as taking customer orders, scheduling operations, and keeping inventory records.)

“The expo lets the group show shareholders where it is going, and give them back value. “We are very excited about the group.

We are very excited about growth. It is a record year, $1.1 billion in profitability, and we are also very excited about the future.”

He said the group has about 3,500 shareholders, with that number staying fairly steady due to each one’s reluctance to sell shares which have been so profitable. “Shareholders don’t want to sell the share. We’ve increased our dividend ($1.30) and the dividend-yield is over three percent, when if you had the same money in the bank you’d be getting less than one percent,” Brooks said.

When asked about Group chairman/CEO Norman Sabga’s earlier remark that the group won’t issue any new shares. Brooks replied, “We actually did a stock-split back in 1988 or 1989.

It was a two-for-one stock-split, and if you go back to our share-price before the stock-split, in other words if you were to go to the true price of the shares, it would be approximately $133.

But the shares split in two in 1989 and since that time the shares have appreciated to $66.” He said there are not now any plans to do any other stock-split. “What we intend to do is focus on growing value, growing profitability and growing our earnings ($4.31 after a double-digit increase in earnings last year).”

He added, “We are very excited because the group has substantial cash, over $500 million in cash, which we could deploy on acquisition-led growth, and then the investments in cap-ex in many parts of our business — in our systems, warehousing, equipment, and in training people — we feel will lead to very strong organic growth, as well as very strong acquisition-led growth. Many of the economic indicators are in fact positive. The country has US$12.3 billion in foreign exchange” that is one’s year’s cover,” Brooks explained. “In 2013, the economy grew by 1.5 percent, in Q4 of 2013 the economy grew by 2.1 percent, in Q1 of 2014 the economy grew by 1.5 percent, the non-energy sector in fact has grown by 2.1 percent.”

He said the Central Bank is helping business expansion by low-interest rates, based on a 2.75 percent repo rate (the interest the Central Bank charges private banks to borrow money overnight and which in turns determines these banks’ lending rates to clients). “Private sector credit is growing.” Brooks was also pleased about Repsol’s discovery of a find estimated at 40 million barrels of “oil equivalent”.


Source:
Newsday
Monday July 7, 2014

http://www.newsday.co.tt/business/0,197297.html