Mar 2007 Financial News

GraceKennedy takes 30% stake in Barbados' Trident Insurance Company

Mar 07, 2007

Just under a week after announcing that it had acquired UK food distribution company WT Foods for £23 million, Jamaican conglomerate GraceKennedy yesterday said it had bought a 30 per cent stake in Barbados' Trident Insurance Company.

The purchase was spearheaded by GraceKennedy Financial Group (GKFG), headed by Don Wehby, and gives the Jamaican company approximately 900,000 Trident Insurance shares valued at a little over US$1 million. Cooper Gay (Holdings) Limited, one of the world's leading independent insurance and reinsurance intermediaries, divested its shareholdings in Trident to GKFG and remaining shareholders.
The Leacock Group of Barbados has controlling interests in Trident Insurance with a 55 per cent shareholding.

"The Leacock Group is extremely happy to be associated with GKFG in the Trident joint venture and looks forward to an extremely rewarding relationship as we expand Trident in Barbados and throughout the CSME," said Trident's CEO Algernon Leacock, who will continue in the driver's seat.

Trident Insurance Company is the seventh largest general insurance player in Barbados with 8 per cent of the market. In 2006 the firm, which has been in existence for over 30 years, saw gross premium of US$12 million with its after-tax profit coming in at US$600,000.
Last week, chairman and CEO of GracKennedy Douglas Orane announced the acquisition of WT Foods, which has annualised sales of £60 million. In 2005, the total market for ethnic foods in the UK was estimated at £1.3 billion.

According to its unaudited statements, GraceKennedy garnered revenues for 2006 of J$36 billion, a 9.25 per cent increase on the J$33-billion posted for 2005. For the December 2006 quarter, Grace's revenues came in at J$9.6 billion as opposed to J$8 billion in the previous year.

But while revenues increased, profits fell, with its net profit for 2006 standing at J$1.87 billion compared with J$2.1 billion registered for 2005. The picture was not that much brighter for the December quarter as net profit fell to J$659 million from the J$946.3-million booked for the corresponding period in 2005.

At the end of last year, Orane undertook a reorganisation exercise and contracted operations from four to two units, namely GraceKennedy Foods and GraceKennedy Investments. He also declared that Grace would be undertaking a number of strategic acquisitions as it sought to grow both revenues and profits and deepen its presence in the Caribbean.

Speaking on its latest acquisition, Wheby, who is also deputy CEO of GraceKennedy Limited, said: "This move is in keeping with our expansion strategy within the English-speaking Caribbean. We are excited about our continued expansion into the Barbados marketplace and our association with Trident, which is a profitable entity with significant growth potential in Barbados and the region."

Grace is intent on becoming the dominant general insurance player in the region and it is going about it via the equity partnership and strategic alliance route. It has a 100-per cent holding in First Global Insurance Agency (Turks & Caicos). It also has a 30-per cent stake in St Lucia's EC Global Insurance with the Bank of St Lucia holding the remaining 70 per cent.

Three years ago, Grace acquired a 40 per cent of Signia Merchant Bank, a Barbadian entity which continues to record double-digit growth in both profits and revenues.

Asked yesterday whether GraceKennedy intends to expand further into the Caribbean, Wheby said: "We feel that Trinidad will be a very attractive market for us and we will be looking to establish a presence there."

Al Edwards
Business
The Jamaica Observer
Wednesday, March 07, 2007
http://www.jamaicaobserver.com/magazines/Business/html/20070306T200000-0500_120023_OBS_GRACEKENNEDY_TAKES_____STAKE_IN_BARBADOS__TRIDENT_INSURANCE_COMPANY_.asp