ANSA McAL

1 May 2015


 

Who are the ANSA McAL Group?

ANSA McAL is the ultimate parent company of a diversified group of companies engaged in trading and distribution, manufacturing, packaging and brewing, insurance and financial services, and media and service industries. The group operates in Trinidad and Tobago, the wider Caribbean region and the United States of America.

Financial highlights for the year ended 31st December 2014

The income and expenditure account

Third party revenue of $6,105 million was 2% lower than that recorded in 2013. In terms of the bottom line profit before tax exceeded $1 billion for the second consecutive year but was 7% lower than the previous year.
If the unrealised losses gains and losses on the financial portfolios held by the groups insurance and banking operations are excluded from the results for both 2014 and 2013, the underlying profit before tax for 2014 would have shown a moderate increase of 2% over 2013.

 

Earnings per share and dividend per share

The ANSA McAL earnings per share (EPS) has fluctuated over the past four years. However the trend is upwards. In 2011 the EPS fell by 4% to $3.46 per share. In 2012 it climbed by 6% to $3.67, and in 2013 it climbed a further 17% to $4.31 per share. On the back of the poor performance of the banking and insurance operations of the group the EPS declined 8% in 2014 to $3.97.

The ANSA McAL group has in the past pursued a policy of paying a consistent dividend payment. Up to the 31st December 2012 this amounted to $1.10 in total per share (paid in an interim and final payment). From 31st December 2013 the total dividend paid has climbed to $1.30 per share (an increase of 18%).

Growth in the share price – nothing to report since 2012

Looking purely at year-end share price data ANSA McAL’s share price has remained flat for the past three years (2012 closing share price $66.60, 2013 closing share price $66.50, 2014 closing share price $66.40).
Looking at the past five years any significant movement in the ANSA McAL share price occurred in 2011 when the share price rose by 7% and 2012 when it rose by 45%.
Since 31st December 2014 the share price has grown nominally to $66.91 at the time this blog entry was written.

Balance sheet factors

For the year ended 31st December 2014 cash generated from operations rose by 39% to $1,369 million. In the same period finance costs fell by 14% to $41 million and total assets climbed by 7% to $13,117 million. ANSA McAL has continued to invest significant sums into new fixed assets investing $276 million in 2013 and $184 million in 2014.
Despite a flat share price performance over the three financial years ANSA McAL has substantially increased the value of shareholder funds from $3,901 million in 2010 to $5,769 million in 2014.

Other factors to consider

  • In one form or another the ANSA McAL group has existed in the Caribbean for over 134 years
  • The financial year 2014 was the second consecutive year the group delivered third party revenue of over 6 billion dollars, and profit before tax of over 1 billion dollars
  • ANSA McAL recorded strong gains in its automotive, trading, and distribution segments. These gains offset the disappointing performance of its financial services sector arising from reduced yields on the domestic and foreign investment portfolios maintained in the groups banking and insurance operations. On a year on year basis the financial services sector declined 23%as both local and international portfolios generated $97 million less than the results obtained in 2013
  • ANSA McAL has significant investments in Barbados. While the results of these operations have suffered (essentially holding ground) since the onset of the global economic crisis, the results from Barbados based operations should return to a positive growth path over the next few years as a direct result of structural adjustment programs in Barbados and a pick-up in tourism
  • The groups operations in the United States, Grenada, and St Kitts have all continued to perform well
  • In December 2014 a memorandum of understanding was signed between ANSA McAL and the University of the West Indies for the construction of the Anthony N. Sabga School of Entrepreneurship, the Guardian Media School, and a new home for the ANSA McAL Psychological Research Centre. The contribution made by ANSA McAL is the largest private section contribution ever made to the University of the West Indies

Subsequent to the year end

On the 2nd April 2015 a legal notice was issued by the company pursuant to section 64(1)(b) of the Securities Act advising that the group’s Chief Operating Officer and manufacturing sector head, Mr Gerry Brooks, will retire from all positions within the group effective the 30th April 2015. At the date of writing this blog entry it is not known who will be his successor.

Key ratio analysis

In appendix one to this blog entry we have included some of the key ratios we have used in preparing this blog entry.

Closing thoughts – ready to make some investments?

Firstline Securities Limited offers comprehensive coverage of local and international markets with a bias for the energy sector. Firstline offers a number of unique opportunities to put surplus cash to work either as your asset manager or investment advisor. Please contact us for more details at info@firstlinesecurities.com or at 868.628.1175, we can discuss your investment needs in detail and craft a portfolio that makes sense for you. We look forward to hearing from you.

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