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Rebranding lowers Massy Group’s profits
The Massy Group of Companies, which is reporting successful implementation of its rebranding, saw its revenues increase by $962 million to $8.5 billion for the nine months ended June 30. Newly installed chairman Robert Bermudez said group’s profit before tax increased by three per cent to $617 million before accounting for the one-off rebranding investment.
In his report to shareholders, Bermudez said: “After a $59 million charge for the investment related to the group-wide rebranding programme, group profit before tax declined by 6.8 per cent versus prior year to $558 million and group earnings per share fell by $0.25 to $3.74.” He said without the rebranding investment, the group’s earnings per share would have increased by 4.5 per cent to $4.17. Bermudez said the rebranding investment is expected to make a very positive return to the group.
He said in the third quarter of the financial year, Massy successfully auctioned a $1.2 billion bond. Series A 10-year maturity bonds were oversubscribed by 1.67 times and the Series B 15-year maturity bonds were oversubscribed by 1.90 times. “The weighted average yields on the bonds were lower than the coupon rates of four per cent and 5.25 per cent respectively. The bonds were officially executed on July 30, 2014,” Bermudez said.
“Massy is continuing to pursue the implementation of its strategic plan while executing a cultural tranformation that is required to support the strategy. “Some of the recent acquisitions, such as the Consolidated Foods Ltd supermarkets in St Lucia and the minority shares of the IGL business are already making significant contributions to top and bottom line growth.
“However, contraction in consumer spending in the Barbados economy has adversely affected some of our operations. Massy also incurred incremental costs to its head office to support organisational strengthening in service of the group’s growth strategy.” Bermudez said the rebranding, which took place in all the group’s territories except Guyana and St Lucia, has helped bring focus to its strategy to have subsidiaries work more collaboratively to better and more conveniently serve customers.
He added: “The bonds raised will help to finance growth projects in existing and new territories and assure Massy of low-cost, long-term borrowing. As our cultural changes take root, Massy is becoming entrepreneurial with innovative ideas being stimulated from all ranks of the organisation. “With economic challenges in many of our existing territories, geographic diversification into Central and Latin America is providing new platforms for future growth.”