ADOPTING A BUSINESS MODEL that focuses heavily on overseas diversification is paying off handsomely for Barbadian conglomerate Goddard Enterprises Limited (GEL).
GEL has earned nearly $62 million in profits after what its directors called a “record-breaking” 2015. It included earnings per share of 83 cents – “the highest ever”.
And the group is targeting more of the same this year. Managing director Anthony Ali (below) said the 2016 plan involved “streamlining the business portfolio and continuing to evaluate those businesses that are not giving us the type of return we expect, or do not allow us to focus on a regional strategy”.
“Group revenue and net income for the year ended September 30, 2015 amounted to $924.5 million and $61.9 million, compared with $954.1 million and $48.9 million in the previous year. The group achieved the highest earnings per share (EPS) ever of 83 cents which exceeded prior year’s EPS of 62.1 cents by 33.7 per cent and also surpassed the previous highest amount of 73.7 cents, which was earned in 2008,” the group’s directors reported.
They said this “tremendous result” was “attributable mainly to the one-off non-operational gain of $20.8 million”, which involved a major new joint venture with Trinidad’s Agostini’s Limited. Taking effect from July 1 last year, this partnership saw the establishment of a “new 50:50 joint venture company, Caribbean Distribution Partners Limited (CDP).
While noting that they were operating in a Caribbean economic climate characterised by “high” debts, fiscal deficits and unemployment, GEL said the tourism resurgence was a good sign.
However, even though operating in a difficult environment, they said gross profit expressed as a percentage of revenue was 37.8 per cent, slightly above the 37.3 per cent achieved in 2014.
“Selling, marketing and administrative expenses were $297.8 million, or 32.2 per cent of revenue, representing a decrease by $12.2 million or 3.9 per cent below prior year’s $310 million or 32.5 per cent of revenue. Both the gross profit and selling, marketing and administrative expenses ratios were impacted by the exclusion of the CDP companies from the consolidated numbers…,” the directors said.
“We are extremely pleased to highlight the improvement in operational profit for the review year. Profit from operations before other gains/(losses) – net increased by $5.2 million or 103 per cent over prior year as a result of the reduction in the selling, marketing and administrative expenses.”
Ali said 2015 was a “transformational” year for the group, as it consolidated a number of overseas investments and partnerships, a strategy it has been using increasingly over the years.
“We acquired the remaining 33 per cent ownership of Bryden & Partners Limited in St. Lucia. We entered into the new joint venture, CDP, mentioned before. We restructured the import distribution and marketing division which, as of October 1, 2015, has been renamed the automotive, building supplies and services division,” he reported.
Ali explained that by realigning all of its business in this division into industry channels reporting to one senior manager who is responsible for these particular businesses across the entire region, “this allows us to leverage synergies across like businesses, as opposed to having them managed individually in each country”.
GEL operates throughout the Caribbean and in Central and South America in various areas including airline, industrial, and restaurant catering, ground handling services, general trading, meat processing, printing and print brokers, baking, and packaging.
It is also involved in automobile and automotive parts sales, insurance, real estate, shipping agents and stevedoring, manufacturing of aerosols and liquid detergents, investments, rum distilling, water purification and bottling and island tours.(SC)
