Aug 2008 Financial News

Duprey replaces Ashenheim as Lascelles chairman - Company set for another record year of profits

Aug 06, 2008

Lawrence Duprey, one of Trinidad's most powerful businessmen, has taken charge of his newest asset and solidified his hold on Lascelles deMercado and Company Limited, by taking over as chairman of the conglomerate last week, and giving seats to two of his own lieutenants, Michael Carballo and Geoffrey Leid.

The changes increase the board from eight members to nine, but Lascelles says its business dealings would not be haltered.

George Ashenheim, whom Duprey replaces as chair, stepped down last Tuesday after 33 years in that position and "as he had indicated was his intention upon completion of the acquisition," said a stock market notice on the board changes.

Retirement

Ashenheim's retirement came a day after the 81 per cent acquisition of Lascelles by CL Spirits Limited - the vehicle created by Duprey to finalise the deal and as holding company for CL Financial Group's interest in Lascelles - was wrapped up and the acquired shares, held in escrow by Citibank NA, transferred to the Trinidadian powerhouse via a stock market transaction.

Carballo, CL Financial's group finance director, and Leid, an attorney and advisor on mergers and acquisitions to the group, also sit with Duprey on CL Spirits' three-man board.

Ashenheim, a major shareholder in Lascelles prior to its sale, joined the company as secretary in 1958, was elected to the board a year later and became its chairman in 1975.

"The group has enjoyed, under his stewardship, significant growth and market penetration locally regionally and internationally as a result of his experience and acumen," said Lascelles.

Bigger annual profits

Duprey, his replacement, who has a "reputation as a dynamic and visionary businessman", brings to the Jamaican company 40 years of business experience in the Caribbean.

The stock market filing has reaffirmed a position by Angostura - CL Financial's spirits subsidiary, under which the bid for Lascelles was initially made and the US$634.9 million or US$9.25 per ordinary share acquisition deal negotiated - that no management changes were contemplated at Lascelles' chief subsidiaries.

William McConnell remains as group managing director and also retains his seat on the board.

"All operations will continue as usual and all contracts and business relationships will remain in place," said the notice filed with the Jamaica Stock Exchange by the new board.

Both McConnell and Ashenheim have given up all their holdings in Lascelles as part of the takeover deal.

Lascelles, a $27 billion company by assets, and debt free, became a takeover target because of its strong rum brands, held by its chiefoperating subsidiary, the Wray and Nephew Group. CL Financial also coveted its Globe insurance business.

Lascelles, a blue chip company on the Jamaica Stock Exchange, has averaged $2.5 billion of net profit in the past two years. In the current period, its after-tax earnings have already topped $2.4 billion or $25.38 per share (2007: $1.8 billion/$18.68 per share) as reported in its nine-month results for the period ending June 30, putting the company in line for bigger annual profits at year-end September 30.

Operating income rose by $700 million to $2.48 billion, but, according to Pan Caribbean Financial Services, the nine-month earnings on operations would have been flat were it not for the $639 million of investment gains from the $8.30 per share distribution to shareholders by Carreras Limited.

Lascelles has paid no returns to shareholders in the current year, but, Pan Caribbean expects that in the periods ahead, the company will increase its dividend payout to help service the US$325 million of debt acquired by CL Financial to finance the acquisition.

Within the current year, Lascelles has become the most expensive stock on the Jamaica Stock Exchange, boosted by the takeover bid. The stock, at one point, reached $610 but is currently trading at around $500 per unit.

Duprey eventually plans to merge the spirits business of Wray and Nephew and Angostura, to boost CL's position in the world spirits market. Spirits accounted for 56 per cent or $10 billion of the $18 billion of revenues reported by Lascelles, year to date June.


Source:
business@gleanerjm.com
Jamaica Gleaner
Wednesday August 6, 2008

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