BARBADIAN-OWNED CONGLOMERATE Goddard Enterprises Limited has recorded a drop in profits for the first half of this financial year.
According to consolidated financial highlights for the six months ended March 31, overall net income for the period was $19.1 million compared to $22 million in the prior year, representing a decrease of 13.4 per cent.
The group also recorded a six per cent decline in revenue over the period.
Chairman Charles Herbert and acting managing director John Taylor explained that the decline occurred in the import, distribution and marketing division, where sales of St Lucian subsidiaries were “adversely affected by depressed market conditions exacerbated by the implementation of VAT there on October 1, 2012”.
There was, however, an improvement in the gross profit margin from 34.5 per cent in the prior year to 36.7 per cent during the first half of 2013.
The directors attributed this positive to improved efficiencies across all divisions as well as ongoing improvements in procurement strategy.
However, Herbert and Taylor said Goddard’s selling, marketing and administrative expenses as a percentage of revenues were 31.4 per cent compared to 28.9 per cent in the prior year.
“This is due mainly to mandated increases in payroll costs in some of our Latin American countries as well as difficulties reducing costs quickly enough to compensate for declining sales,” they explained.
The directors added that the group’s cost base would need a thorough review as Caribbean economies continued to be depressed and showed few signs of recovery.
Meanwhile, other net losses and gains declined from a gain of $588 000 to a $1.6 million loss during the period resulting from an increase in inflation expenses recorded by two Venezuelan subsidiaries, revealed Herbert and Taylor.
Profit from operations fell by 17.5 per cent to $25.7 million.
Net income attributable to equity holders of the company was $11.8 million with a basic earnings per share of 19.7 cents – a decline of 22.1 per cent.
The directors noted that cash flow continued to be adequate and the debt to equity ratio remained healthy at 37:63. (NB)
