Here's to good results -- Julian Francis (at podium), Chairman, Commonwealth Brewery Limited, shares positive returns for investors at the company's first annual general meeting since going public last year. The AGM of the country's largest manufacturer and distributor of beer, wine and spirits was held June 28 at the British Colonial Hilton. (Photo by Derek Smith, Jr.)
President's Remarks -- Commonwealth Brewery Limited President and Managing Director Nico Pinotsis, a 27-year veteran with Heineken who took over the helm at the Bahamas brewery in January, projected cautious optimism for the year ahead when he addressed shareholders at the company's first annual general meeting June 28. (Photo by Derek Smith, Jr)
Make that a double dividend -- Shun Chou, Commonwealth Brewery Limited CFO, shares results with shareholders at the company's first annual general meeting. After 25 years in The Bahamas, Commonwealth Brewery made shares available to the Bahamian public last year and the debt-free company has since paid dividends twice. Also picture, Chairman Julian Francis, standing and director Ed Fields, seated. (Photo by Derek smith, Jr.)
Shareholder Presence -- Shareholders who turned out for Commonwealth Brewery Limited's first annual general meeting were treated to corporate gifts and news of a positive return on investment. Though not a record, the company reported a $4 million in increase in total revenue with profits of $17.3 million. CBL paid dividends twice during its first year of being a publicly-held company. (Photo by Derek Smith, Jr., for DPA)
Good News for Shareholders at Commonwealth Brewery Limited's 1st AGM
Shareholders thirsty for good news got it June 28 when Commonwealth Brewery Limited held its first annual general meeting (AGM), reporting a $4 million increase in total revenue and net profit of $17.3 million, results that allowed the totally debt-free company to pay dividends of $0.58 cents a share, a 100% payout.
Shareholders who make up the publicly held portion of CBL turned out at the Governors’ Ballroom at the British Colonial Hilton, not just to hear results but to talk to directors and management of the company that went public last year, almost 25 years after the first bottle of its best-known brand, Kalik, The Beer of the Bahamas, rolled off the conveyor belt. Their appetite for information matched the information they got, robust, including the cautious optimistic projection for the year ahead.
"The first quarter results of 2012 are satisfactory and show a revenue growth of 9.5% for the three months ended March 2012 in combination with a $ 1.5 million increase in net income," Chairman Julian Francis reported. "Whilst this is cause for a moderately positive outlook, we have to keep in mind that the economic environment is still not showing full recovery. Therefore, we should remain cautious in our expectations. Another important condition for the continued success of this company is that we continue to operate on a level playing field where everyone pays the same dues and the means to avoid paying are minimized. For that we will need the support of all stakeholders in our company: staff, shareholders and the government."
Managing Director Nico Pinotsis echoed the sentiment of a positive outlook, noting a strong Spring break added to sales volume and revenue, though there were cost increases as well.
"In 2011, raw materials, consumables and services were up 7%," Pinotsis said. "An increase in personnel costs was partly fueled by annual salary increases for cost of living and merit." Cost of inventories rose $3.5 million. Utility costs increased $0.7 million, excise tax $1.1 million. The company bore the expenses of separation and retirement benefits as it transitioned to a leaner, brand loyal and customer friendly machine. Pinotsis also said CBL was reviewing the retail experience and trade operation in what both executives called an "increasingly competitive environment."
Despite that competition attempting to nip at its heels, Commonwealth Brewery remains the front runner in the nation's bustling spirits industry with 70-plus labels, 380 staff, a major recycling operation, brands like Heineken, Kalik, Guinness and Vitamalt and a comfortable distance between it and number two, a fact that was not lost on the portion of the 3,000 shareholders present. Reinforcing that distance was sales volume that remained stable at 187,000 hectoliters (or nearly 20 million quarts in Bahamian measurement). The only down side was the exportation of Kalik, which fell by 8%. Both the Chairman and the Managing Director noted the impact of a challenging economy on the leisure travel market and non-essential products last year.
"The business environment in the Bahamas remained challenging in 2011. Unemployment remained high and that had an impact on consumer spending and consequently influenced Commonwealth Brewery," said Francis, a former governor of The Central Bank who became chairman of CBL upon its entry into the Bahamas Securities Exchange.
"In spite of the economic circumstances the company increased revenue by $4 million, whilst maintaining the sales volume at 2010 level. Net profit amounted to $17.3 million or 58 cents per share, which was fully paid out as dividend. Net profit declined $ 2.9 million compared to the record profit of 2010. For $1.4 million this was related to other income reflected in 2010 that had a non-recurring nature. Cash generation remained strong. Investments, working capital needs and dividend were sourced from the operating cash flow. The company remained debt free at the end of 2011. Taking the environment into account, I believe that these results are solid and provide a good baseline for future growth." Francis praised the former Managing Director LeRoy Archer for what he called "seven years of meritorious service."
Pinotsis, who took over as managing director six months ago, used the opportunity to share ideas about the future ranging from stringent cost control to enhanced shopping experiences.
"In order to remain successful in the demanding world of today where globalization, the opening of markets and the changing local competitive environment will affect us in The Bahamas, Commonwealth Brewery will have to continue to build on three main pillars: brands and offered portfolio, relations with trade customers and with its retail customers in stores," he said, also citing distinctions in product marketing.
"We have to continue to make sure that Kalik is seen as 'The Beer of the Bahamas', the pride of every Bahamian, that Heineken is seen as the beer for the man of the world, the global benchmark for beer, while Guinness and Vitamalt will have to continue to play their role as absolute leaders in their segment," Pinotsis said, hinting at a stronger emphasis on individual brand marketing. He also noted the importance of maintaining the lead in spirits and wine labels and said the company would look to create what he called "win-win" opportunities with its customers and explore how to net higher customer shopping experience satisfaction in the company's shops. "Paramount is that all the above cannot be achieved without a well-equipped and motivated team."
Shareholders also re-elected Julian Francis, Nico Pinotsis, Eugene Ubalijoro, Algernon Cargill, Bart van den Huijsen, Ed Fields and LeRoy Archer to the Board and re-appointed KPMG as the company's auditors.