Barbados continues to find itself floundering in a challenging economic position. This current state of affairs means that investors continue to make decisions to ensure their fiduciary responsibility to protect shareholder interest is protected. It i no secret a saturated domestic investment market in Trinidad has driven T&T investors to look ‘outside‘ to maximize return on investments. One company which has led the T&T charge is Neal and Massy (N&M).
N&M has posted its 2013 Annual Report (153 pages). It is an interesting read but it will take a few hours. The report confirms what we know, the extent to which the Trinis dominate the local business landscape. A few observations about the 2013 Annual Report submitted by resident researcher Due Diligence.
At page 45 of the report the company reports a modest increase in profit from Barbados operations to TT$231 million. Comments about the Barbados Group are:
The Barbados Group of companies recorded an increase in profitability which is commendable given the challenges facing the Barbadian economy namely: stagnant economic growth, high unemployment and a large fiscal deficit. The country’s main foreign exchange earner, Tourism, continues to suffer and continues to see sluggish tourist arrivals and weak tourism output. In addition to the inherent difficulties facing the economy, the proposed austerity measures in the 2014 Government Budget, albeit necessary to reduce our deficit and build foreign exchange reserves, set the scene for even more challenging times ahead. Despite the gloomy outlook for the economy, Neal & Massy remains committed to Barbados and will continue to prudently invest and prepare its operations for the future. The Barbados Group will continue its deep focus on leadership development, talent management and achieving cost efficiencies as it continues to manage its operations through the current economic storm. In addition, through execution of our Barbados Retail Transformation plan, green field developments and investments in alternative energy, the Barbados Group will continue to ensure it is well poised to take advantage of opportunities when the Barbados economy rebounds.
The following is on page 11 of the 2013 Annual Report:
In December 2013, after the end of Financial Year 2013, the sales of both Almond Beach Village and Almond Casuarina hotels were closed. This marks the end of the restructuring arising from the acquisition of Barbados Shipping & Trading Co. Ltd. and the fallout of the global financial crisis of 2009. In due course, Almond Resorts Inc. and Casuarina Beach Club Limited will be wound up and liquidated.
No details were provided, we will have to wait for the 2014 Annual Report for more disclosure if the company adheres to transparency. At page 71 of the Report it records N&M share of equity Almond Resorts and Casuarina Holdings as:
Almond Resorts Inc 52.0%
Casuarina Holdings Inc 49.9%
A couple of questions:
Who owned the remaining share of equity in these companies?
Who was purchaser of these hotels?
Government has said it purchased the Almond Beach Village property for US$53 million with “an initial cash payment of US$25 million and the balance of US$28 million being paid over three years at an interest rate that is still to be agreed between the two parties. And will invest $500 million to demolish the Almond plant and build a new Beaches plant”.
It has been inferred in media reports that Sandals bought the Casuarina Hotel but did it? SRI/Gorstew (see – Sandals Documents) being privately owned by “Butch” do not disclose financial information. Comments like “the keys were turned over to Sandals” suggest they may in fact not have bought the property or shares in Casuarina Holdings Did Government purchase the the Casuarina property and turn it over to Sandals to operate?
What we know is that investors with smarts know when to invest to ensure their maximum interest is protected. We need our government who were elected to safeguard our interest to be smart.