Angostura sees increase in net sales; interest income falls for ANSA Finance

Angostura Holdings Limited
Results for the Year Ended December 31, 2002

Angostura Holdings (AHL) net sales totalled $1.034 billion in 2002 compared to $1.018 billion made in 2001.  This represented an increase of 1.6 percent.  Gross profit was 2.6 percent higher at $396.9 million in 2002, up from $386.8 million a year earlier.  Operating profit declined by 9.9 percent to $124.4 million in 2002, down from the $138.1 million recorded in 2001.

The gross margin was virtually unchanged at 38.3 percent in 2002 compared to 38.0 percent in 2001.  In the period under comparison, the operating margin declined to 12.0 percent from 13.6 percent.  Pre tax profit was 30.4 percent lower in 2002 at $67.7 million from the $97.3 million made in 2001.  In 2001 AHL reported a gain on sale of investment of $27.2 million, in 2002 there was no such gain.  After tax profit decreased by 7.4 percent to $58.6 million when compared to the $63.2 million achieved in 2001. 

AHL was unable to consolidate the results of Burn Stewart Distillers plc as the transaction was largely completed during the first quarter of 2003.  These results will be consolidated in 2003 and the first half report would give an indication of the level of benefit to AHL.  We would also expect contributions from Burn Stewart to be offset somewhat by increased finance charges and goodwill amortisation. 

The Chairman pointed to an ‘extremely competitive’ international trading environment.  He stated that AHL has yet to realise the ‘full potential of our top and bottom line growth opportunities’. Earnings per share reached 28 cents in 2002.  In 2001 the earnings per share disregarding the extraordinary gain on sale of investments was 18 cents.  Therefore AHL posted a 55.6 percent improvement in EPS on income from core operations.  A final dividend of 6 cents per share has been declared, payable to shareholders on May 16, 2003.  The total dividend paid in respect of fiscal 2002 would be 11 cents, compared to 8 cents paid in 2001.  At the current price of $6.30, the P/E ratio is 22.5, above those of its peers in the manufacturing sector. 

ANSA Finance and Merchant Bank Results for Year Ended December 31, 2002.

Interest income declined by 11.4 percent for ANSA Finance and Merchant Bank (AFL) in the fiscal year ended December 31, 2002.  Interest income was $83.4 million in 2002 compared to $94.1 million made in 2001.  Net interest income increased however by 12.1 percent in 2002 to $28.6 million from the 2001 figure of $25.5 million.  Interest expense declined 20.1 percent in 2002 to $54.8 million, down from the $68.6 million incurred in 2001.  This suggests that AFL has been able to efficiently manage its interest rate risk in an environment of weak credit demand together with declining margins. 

AFL’s effective tax rate declined to 12.6 percent in 2002 compared to the level in 2001, which was 14.0 percent.  Net income increased 11.5 percent in 2002 to $21.2 million, up from the $19.0 million achieved a year earlier.  Earnings per share totalled 68 cents in 2002, improving from 61 cents made in 2001. 

Furness Trinidad Limited
Results for Year Ended December 31, 2002.

The Group’s results for the financial year ended December 31, 2002 showed a marked improvement in the performance of the company.  Group turnover increased by 13.01% from $25.42 million in 2001 to $28.73 million in 2002. The key contributors to the Group’s improved operations were Furness Chemicals Limited which experienced increased business from a number of bottlers and brewers in the Caricom area and Furness Rental Limited the rental leasing company.  The Marketing and Distribution sector also performed well as a result of the addition of a range of new lines and an increase in customer base. 

The Cold Storage facilities also enjoyed high occupancy in 2002, making a worthwhile contribution to the Group’s performance. Operating profit grew by 46.84% from $2.73 million in 2001 to $4.02 million in 2002.  Profit before taxation moved from $3.30 million in 2001 to $4.42 million in 2002, an increase of 33.78%.  The Group’s effective tax rate fell from 35% in 2001 to 31% in 2002, due to a decline in deferred taxation of 64.78% reflecting the reduction in the corporation tax rate.  Profit attributable to the Group increased by 43.04% from $2.13 million in 2001 to $3.04 million in 2002. Earnings per shares (basic and diluted) moved up 38.89% to 25 cents in 2002 from 18 cents in 2001. The Board of Directors earlier in the year approved the payment of a 5 cents interim dividend in respect of the financial year, which was paid to shareholders on March 15, 2003.  The Board has recommended no further dividends despite the improved performance of the company.

Major Advances
Furness up 10 cents (+3.17 percent)
ANSA Finance up 5 cents (+0.61 percent)
WITCO up 9 cents (+0.49 percent)
Lever Brothers up 10 cents (+0.36 percent)

Major Declines
BWIA down 5 cents (-2.22 percent)
JMMB down 1 cent (-1.06 percent)
Readymix down 5 cents (-0.70 percent)

Major Advances
CCN up 80cents  (+24.17%)
National Flour Mills up 50cents (+15.87%)
PLIPDECO up 34 cents (+3.19%)
Furness up 10cents (+3.17%)
Neal & Massy Holdings up 49cents (+2.51%)
ANSA Finance up 20 cents (+2.50%)

Major Declines
Prestige Holdings down 20cents
(-4.55%)
Trinidad Cement down 26 cents (-4.15%)