Jun 2008 Financial News

Sagicor CEO: We will continue to seek opportunities to grow

Jun 16, 2008

SAGICOR Financial Corporation has done very well in the Caribbean as well as in its initial entry in the USA and the UK. Now the international market is being viewed as having opportunities for the company to pursue more growth and expansion, as well as maximising returns for its shareholder.

How well it does in achieving these, will depend to a large extent on the prevailing international economic climate and how the company continues to manage its investments in those markets, especially in such trying times.

Last week, top personnel of Sagicor hosted an investors meeting at the Hilton to review the companys performance for last year, as well as make projections for this year.

Chairman Terrence Martins reported that last September, Sagicor acquired a managing agency of a Lloyd syndicate and rebranded it to Sagicor at Lloyds. There was an acquisition of a distribution network which supports the Sagicor at Lloyds business. Sagicor also became the first Caribbean company to list on the London Stock Exchange.

The results have shown several positive performance indicators.

Return on both assets and equity, earnings per share, the companys share price, revenue and profitability gains, and a bullish outlook, were some of the highpoints revealed by Ravi Rambarran, Executive Vice President, Corporate Strategy, and Dodridge Miller, President and CEO of Sagicor.

Total shareholder return in 2007 was 30 per cent, which Mr. Miller based on dividend and capital appreciation. In addition, return on shareholders equity was 22 per cent, earnings per share was 64.6 cents (Bds), revenue was Bds$1.5 billion, and net income $216.4 million.

These would bring a great deal of satisfaction to shareholders, and enhance confidence in the companys management.

The performance indicators underline the extent to which management has appropriately utilised the companys resources to telling effect and to bring returns to stakeholders.

Their next task is to maintain the strong growth path of the company, and especially in the USA and UK.

Looking ahead, Miller said that the 2008 outlook for the global economy is one of lower growth or negative growth. The fall out of the credit crisis and the almost certain recession in the US economy will present its challenge across the global financial landscape, he remarked.

A recent ECD Organisation for Economic Co-operation and Development report suggests a 1.8 per cent growth rate for the UK economy this year and 1.4 per cent next year. These are in line with Bank of England projections, which in any case noted that UK inflation may rise above four per cent in the second half of this year. The rate is expected to stay that way for at least another quarter.

While recessions are usually viewed as difficult, astute investors have used such downturns to acquire assets and make other investments, so that when the boom returns to an economy, these investments then begin to bear fruit. It therefore would not come as a surprise if Sagicor makes further acquisitions in those markets.

In fact, although declining to comment on future acquisitions, Mr. Miller said the company is constantly seeking out opportunities that make sense to the Group. So we will continue to grow, he told the media.

Mr. Rambarran said that one of the key strategies they will be maintaining is a capital managemenstrategy, which Sagi -cor has effected to good effect. Part of that strategy, he highlighted to the investors, was the listing of Sagicor on the London Stock Exchange, the expanding of the companys products and services in the USA and the purchase of the insurance portfolio of a Canadian company in Curacao.

These achievements were consistent with our core strategy of capital management: building geographical scope, broadening our product scope and continuing to streamline our operations, said Rambarran.

He further noted that the results indicated at least three messages. The first he revealed was that the numbers indicate that the year 2007 was a fantastic year given the economic framework in which we operated, thats the first message.

The second message, he stated, is that since demutualisation, the overall returns to shareholders have been attractive, despite some years when the markets were slow to recognise the performance of the Group.

The last message ... is that all of this performance has not been by happenstance (coincidence), it has been by crafting and executing a deliberate strategy of streamlining existing operations, expanding our geographic scope and product base, and managing capital optimally, he added.


Source:
By Jewel Brathwaite
The Barbados Advocate
Mon Jun 16 2008

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