Neal & Massy
fuelled by high revenues
Port Spain
Petroleumworldtt.com
12 16 07
Neal & Massy
Limited (NML) marked the end of its 2007 financial year with an overall impressive
annual performance, despite a somewhat muted last
quarter
(EPS growth of 8.5 per cent. The Group produced year on year earnings growth
of 23.2 per cent with an EPS of $4.15 for the financial year ended September
30, 2007 (2006:$3.37). The board of directors declared a final dividend of
$0.90 per share, bringing the total dividend for the year to $1.26per share.
This dividend is scheduled to be paid on January 7, 2008 to registered holders
of shares at the close of business on December 21, 2007.
At
the top line, Group Third Party Revenue reported
a 21 per cent increase over 2006, crossing the
$5B mark to $5.1B.This impressive achievement was
a direct result of the higher revenues generated
by every business unit of the Group, as seen in
Exhibit 1 right. The more mature units, 'Auto & Industrial
Equipment', and 'Retail Distribution & Logistics',
delivered commendable performances, increasing
revenue by 14 per cent and 17 per cent respectively.
Significant growth was evident in the rapidly expanding
'Finance & Property', 'Energy', and 'Industrial
Gas' units.
Operating
Profit experienced an 18 per cent boost from
$401.5M to $473.7M. However, the Group'sOperating
Profit margin suffered a marginal decline from
9.6 per cent to 9.3 per cent. Contributions from
Associated Companies, such as BS&T, more than
doubled from $31.9M to $70.9M.
Profit before taxation improved 26 per cent over
the prior year to $544.6M. An unchanged effective
taxation rate of 27 per cent led to a 25 per cent
increase in Net Profit from $318.5M to $397.3M.
After factoring in Minority Interest, Profit Attributable
to Shareholders experienced a 23 per cent increase
to $369.1M.
Throughout the years NML has shown its commitment
to maximising shareholder returns. As shown in
Exhibit 2 below, EPS and dividends per share have
revealed consistent growth over the years.
In addition to sustained growth in its revenue
and profits, NML has maintained a strong asset
base in excess of $3.9M, representing a 12.9 per
cent increase over 2006.
In
related news and as a gentle reminder to investors,
the current offer by NML for the takeover of Barbados
Shipping & Trading Company Limited (BS&T)
expires today. NML has announced that to date,
more than 42 per cent of the outstanding shares
have been tendered to the Neal & Massy offer.
When added to the Group's existing shareholdings,
this brings the total to over 71 per cent of the
outstanding share capital of BS&T.
In
an article published in the press on Thursday
December 13, the Executive Chairman of Neal & Massy
Energy Limited, Gervase Warner, expressed strong
confidence in his Group consummating the deal with
BS&T. He commented, "We have been investing
in BS&T for nine years now and this is a company
that is part of the Neal & Massy family."
With
a current price of $48.51, this stock is trading
at a trailing P/E multiple of about 11
to 12 times. With the beckoning of a new financial
year, further growth is anticipated for this Group
given its track record over the years of consistent
double digit growth. Moreover, even greater benefits
can be expected, should the Group be successful
in the acquisition of the Barbadian Conglomerate,
BS&T.As such, BOURSE maintains a BUY recommendation
for this stock.
National Enterprises Limited
National Enterprises Limited (NEL) displayed a
much awaited improvement with the release of
its financial results for the first half of the
financial year 2007-2008. For the six months
ended September 30, 2007, the Group reported
an EPS of $0.64, an impressive 88 per cent over
the previous comparable EPS of $0.34. The board
of directors of NEL has declared an interim dividend
of $0.19 per share for the financial year ended
March 31, 2008, which will be paid on December
19, 2007.
TSTT, once the main income generator of NEL, which
had been suffering in the last financial year,
has finally rebounded. The increased profit of
NEL can be traced to this welcomed turnaround of
the Telecommunications Company, whose profits more
than doubled year on year, from $20.3M to $56.4M.
It is imperative that the company maintain this
momentum in the second half of the year and there
is no repeat of last year's final six months performance.
The
energy related companies continued their good
performance. The Chairman in his statement commented
that, " NGC Trinidad and Tobago LNG Limited
(NGC LNG) and NGC NGL Company Limited (NGC NGL)
have continued to generate sound profits after
taxes as prices for liquefied natural gas and natural
gas liquids remained buoyant."
At the bottom line, Net profit of the Group was
up 102 per cent from $185.1M to $373.2M. Going
into the second half of the financial year, Tringen,
one of the companies comprising NEL, has had a
disruption in its operations, due to ongoing industrial
relations problems. The more time passes with this
matter being unresolved could prove damagingto
the profits and dividends of NEL, since Tringen
is a major supplier of dividends to the Group.
With the recovery of TSTT, and hopeful of its
continued good performance, further growth in profits
for NEL is anticipated in the second half of the
financial year. With a current price of $7.15 and
a forward P/E multiple of about 9.4 times, BOURSE
maintains a HOLD recommendation for this stock.
Story
from
Trinidad Express
Trinidad
Express
Monday, December 17th 2007
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