Aug 2011 Financial News

Changing the image of rum

Aug 11, 2011

Angostura chief executive Wayne Yip Choy says the rum and bitters producer sponsored the BOLD event at the Jean Pierre Complex on Sunday night because he wants to change the image of rum in the local market. Angostura distributed thousands of invitations to BOLD to a cross-section of mostly young, upwardly mobile adults who had access to free snacks and drinks as well as some of the country’s top performers including Machel Montano and Ricki Jai. Speaking with the Business Guardian on Monday, Yip Choy said the first BOLD event, which was held last year at the Queen’s Park Oval, was part of the company’s campaign to launch its Single Barrel campaign.

He said the event last year was an example of experiential marketing which contributed to increasing the company’s sales by 18 per cent. “The whole idea of BOLD, both last year and this year, is to change the image of Angostura and capture a new generation of drinkers. We are targetting a younger demographic who never considered rum to be their drink.” He estimates that 330,000 cases of whiskey and vodka are sold in T&T annually and he sees those non-rum drinkers as a potential growth market for the Laventille-based company. Angostura’s first half results indicate that Yip Choy’s strategies are working. Angostura recorded sales of $394.6 million for the first six months of this year—an increase of 11.6 per cent compared with January to June 2010.

But the company’s after-tax profit declined by 65 per cent from $101.3 million for the first half of 2010 to $35.8 million for the first half of 2011. Yip Choy said that Angostura spent an additional $17 million in advertising and marketing during the first half of this year and took a $25.9 million hit as a result of the impact of its exposure to the volatility of the euro on a legacy loan. He said the added advertising and marketing expenses of the first half, which he described as an investment in the growth of the company’s top line revenue, will not be repeated in the second half. While the first six months of the year saw disappointing after-tax results, Yip Choy is sticking to his guns in terms of the prediction he made at the company’s 2010 annual general meeting earlier this year to report $1 in earnings by the end of 2011. Angostura’s earnings per share for the January to June period was $0.17 a share.

Yip Choy said that his confidence in achieving the $1 earnings per share target was based on the fact that 60 per cent of the company’s sales come in the second half of the year. He said, though, that his commitment to pay a dividend to Angostura shareholders in 2011 may have to be delayed because of the new accounting standards. He said the reversal of the euro gains from the end of 2010 to June impacted on the company’s gearing ratio—which is a measure of the amount of debt a company takes on compared with its own resources. He, however, renewed his commitment to pay dividends to Angostura’s shareholders as soon as possible.


Source:
Trinidad Guardian
Thursday August 11, 2011

http://www.guardian.co.tt/business-guardian/2011/08/11/changing-image-rum