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Agostini’s sales and profit increase in 2016

Published: 
Saturday, January 7, 2017

Agostini’s Limited has achieved increases in sales and profits in the first full year of its joint venture with Goddard Enterprises Ltd (GEL) of Barbados.

After the two companies joined their fast moving consumer goods businesses to form Caribbean Distribution Partners Ltd (CDPL), Agostini’s achieved group sales of $2.5 billion and profit attributable to shareholder of $89 million for the year ended September 30, 2016.

This compares with $1.7 billion and $77.2 million respectively in the previous year, respectively.

Earnings per share was $1.52 compared with $1.32 in 2015, an increase of 15 per cent.

“Included in the current year’s results is a gain of $11.7 million as a result of the settlement we received in the arbitration proceedings with the Housing Development Corporation,” outgoing chairman Joseph Esau said in a note to shareholders.

Agostini’s annual report, which was posted to the T&T Stock Exchange yesterday, showed that the company’s year-end debt gearing ratio remained strong at 30 per cent.

Esau, who is stepping down after 12 years as a director and chairman with the group, expressed optimism about Agostini’s prospects in the coming year.

While acknowledging the difficult economic times being experienced across the Caribbean due to macro economic challenges, he said the group had made strategic acquisitions and growth investments and had robust operations in all its markets.

“We are also in a strong financial position that allows us to continue building our infrastructure, and to grasp new opportunities,” he said. “We therefore face the current challenges and future with confidence.”

Esau said Agostini’s pharmaceutical and personal care division, Smith Robertson, had produced good results despite significantly reduced purchases from the Ministry of Health’s NIPDEC procurement arrangement.

SuperPharm had a good year at all its eight locations and will open a Mausica store in the coming year, with another branch at Couva shortly thereafter, he said.

Esau said Agostini Building Solutions had achieved “reasonable results in a very depressed construction sector” and Rosco Petroavance, the oilfield, industrial and hydraulic products business, experienced a challenging year due to the very depressed energy sector.

“The CDPL companies showed progress in most of the markets in which we operate. Hand Arnold performed well notwithstanding the difficult Trinidad and Tobago economy. Coreas Distribution of St Vincent produced excellent results, and Desinco of Guyana made reasonable progress in expanding the business with improved profitability,” he said.

“Hanschell Inniss of Barbados, Peter and Company of St Lucia and Independence Agencies of Grenada had a challenging year, performing below expectations. With CDPL’s recent acquisition in Trinidad of Vemco Limited and Pepsi Cola Trinidad Bottling Company Ltd, there is much activity in positioning ourselves to capture synergies while growing these businesses.”

Agostini’s acquired Vemco Ltd for an enterprise value of $277.9 million ($177.3 million net of debt) through a new share issue, simultaneously transferring the company to CDPL, and received $88.7 million from GEL for its 50 per cent interest in Vemco through CDPL.

Esau said: “The company is a major food products manufacturer, owns the Swiss, Catelli, Katerpak, Cafe Brazil and Yogos brands, and distributes Quaker, Campbell’s, Kerrygold, Dole, Gatorade and Purina products, among others in Trinidad and Tobago. We expect this transaction to be accretive to our group’s earnings per share in 2017 and beyond.”

He said the November 1, 2016, acquisition by CDPL of Pepsi Cola Trinidad Bottling Company Ltd (PCT) for US$13 million, “positions CDPL to be a substantial player in the beverages business in T&T, and improves our reach in the Eastern Caribbean for certain of these products.”

PCT owns the Fizz and JuC brands, and distributes Pepsi, Gatorade, Peardrax, Cydrax, 7up, Mountain Dew and Ocean Spray products in T&T.

Esau, who will be retiring from the board at the close of the annual shareholders’ meeting on January 23, will be succeeded as chairman by Christian Mouttet.