Page 48 - Neal and Massy Holdings Annual Report 2012

46 2012
are essential rawmaterials in the production of all the products within
the portfolio. Management was able to cushion these through its
purchasing methods together with the consistent application of
standard formulations and pricing so as to generally achieve stability
in margins. New products are planned for certain market segments
which show room for growth while the company continues to pursue
the means to retain or improve market share for existing products.
BCB Communications Incorporated (BCB) (51 percent), the
in-house advertising agency for our Barbados companies and Banks
Holdings Limited, recorded a net profit four percent higher than
the prior year. For this period BCB managed its expenses carefully
and realised a 9 percent reduction versus prior year. These savings
were due to a decrease in employment expenses and prudent
management of other expenses throughout the year. The overall
performance was hampered by the economic slowdown in Barbados,
which resulted in reduced advertising spends and encouraged BCB to
look for new marketing options such as new media communication
platforms.
Banks Holdings Limited, (BHL) (20 percent) is the holding
company for the group of businesses in Barbados involved with
beverage production (namely beer, soft drinks, juices and milk) with
investments in the Coca Cola bottler in The Bahamas, Banks beer in
Guyana and a citrus producer in Belize. The performance of BHL was
led by its associated companies, specifically Banks DIH in Guyana and
Citrus Products of Belize Limited. In the case of Banks DIH, strong
economic growth in Guyana has led to significant volume increases
and these have generated record profits for that company. A good
crop and robust commodity pricing resulted in a strong performance
of Citrus Products of Belize while other associates also recorded
improved results in line with expectations.
Unfortunately the recessionary environment in Barbados
continued to limit sales across all product lines and there was no
meaningful growth recorded across the brands. While not yet
operating at optimum levels, the new brewery has nevertheless
brought several operational savings and profitability in that operation
was in line with expectations and ahead of the previous year.
Signia Financial Group Incorporated (20 percent) experienced
a difficult year. 2012 was a challenging financial year in Barbados,
for the finance and banking sector, with high liquidity and high
delinquencies in an environment of increased unemployment.
Additionally, new Central Bank regulations restricted the spreads
and earnings in foreign exchange trading. Net interest income
improved marginally, but with higher loan provisions and reduced
trading income, profitability was notably lower for the period under
review.
Seawell Air Services Limited (SAS) provides ground handling
services to several of the major airlines serving Barbados such as
British Airways and Caribbean Airlines. The Company’s revenue
increased only marginally for the year under review but management
achieved a decrease in overall costs year on year resulting in a modest
profit on operations. Unfortunately the withdrawal of Redjet in the
first quarter of 2012 notably impacted revenue and profitability for
the financial year.
Caribbean Airport Services Limited (CAS) (49 percent), which
provides ground handling services at the V.C. Bird International
Airport in Antigua, faced similar challenges to those of SAS. The
company will produce a small profit for its financial year ending
December 2012, following the addition of LIAT’s cargo handling
business and the contract to handle Westjet during the year.
Based in Montreal, Canada, Medina Foods Incorporated (30
percent) provides consultancy services and food safety audit services
to food processors and producers with food safety assurance
programmes. A key area of its business is the audit of airline caterers
worldwide on behalf of many major airlines through its Barbados
subsidiary Medina International, which is an International Business
Company. Medina’s results grew reasonably for the year under new
arrangements with the airlines.
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