Dec 2010 Financial News

Neal & Massy profits down 12.5 per cent

Dec 20, 2010

NEAL & Massy Holdings Limited, the Trinidadian conglomerate that took control of the Barbados Shipping & Trading Company Limited (BS&T) in 2008 and recently announced a decision to discontinue operations at Warrens Motors Inc., recorded a decline in pre-tax profit of 12.5 per cent for the year ended September 30th, 2010.

According to the company’s published financial statements, key operating business units experienced reasonable growth over the 12 month period. However, these were offset by the disappointing performance of Almond Resorts and losses incurred by Bahamas Supermarkets Ltd. (BSL), and Warrens Motors.

It was recently reported that Neal & Massy expects operations at Warrens Motors to be discontinued early in the new year, a move that follows the sale of BSL last month.

In his comments accompanying the financial statements, Chairman Arthur Lok Jack said “attempts to fix these companies proved unsuccessful with important structural disadvantages turning out to be too significant to overcome”.

As such, the Group took the decision to “exit these investments and curtail future losses” and, as a result, it is expected that operating losses in 2011 will be minimal.

At the end of the year, pre-tax profits stood at TT$605.7 million (Bds$201.9 million), some $87 million (Bds$29 million) or 12.5 per cent less than the $692.2 million (Bds$230.7 million) recorded at the end of the September 2009.

After accounting for taxation, as well as losses for the year from the discontinued operations highlighted above, net profit for the year was $483.5 million (Bds$161.1 million), $177.5 million (Bds$59.1 million) or 36.7 per cent less than the $306 million (Bds$102 million) recorded a year earlier.

The Group experienced good growth in the profits of the Food Group, Finance, Property and Other Business units. Notwithstanding, the challenging economic climate adversely affected their construction-related businesses in the Automotive & Industrial Equipment Business unit. As stated earlier, the Group’s tourism and hospitality investments, represented by Almond Resorts, performed below par, as they were impacted by the decline in occupancy rates.
Looking forward, Lok Jack sad the business environment continues to be challenging, but argued that the Group remains strong.

He stated that the Group has several exciting growth prospects which it is pursuing and evaluating, including potential acquisitions and investments in the energy sector.

Attention will also be paid to further expansion of their Hi-Lo and Super Centre supermarkets in Trinidad and Barbados respectively, while they will also be looking at emerging opportunities in Guyana and the Dominican Republic.


Source:
By Randy Howard
Barbados Advocate
Monday December 20, 2010

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