Grenada Today - The National Newspaper of Grenada, Carriacou & Petite Martinique

JONAS BROWNE AND HUBBARD (GRENADA) LIMITED is reporting “a very satisfactory financial performance” for 2005.

In its just released annual report, the company indicated that its revenues for the last financial year totalled EC$123.7 million which was 35.5% more than recorded in the previous year.

Hubbards’ whose major shareholder is now the Goddard Group of Companies in Barbados also saw its share value increase significantly by almost 300 percent. Goddard had purchased shares from local shareholders at approximately $25.00 a share and these shares now have a book value of over $60.00

The report which was put together by Managing Director Allan Bierzynski and Chairman of the Board of Directors, Barbadian Ian Alleyne warned that the company cannot expect to see a repeat financial performance this year due to problems in the construction industry, especially an ongoing shortage of cement.

“Indeed, the shortage of cement experienced over the last several months has already impacted negatively on our important building materials department”, Bierzynski and Alleyne said in their report.

Following is the full text of the 2005 Annual Report issued by Hubbards’:

Consolidated gross revenues of $123.7 million exceeded the 2004 total by 35.5% fueled by the extraordinary demands of post-Ivan reconstruction.

These record revenues provided earnings before taxation and exceptional items of $11.5 million, and increase of 95.5% and earnings after taxation and exceptional items of $7.4 million, and increase of 253%.

Our wholly owned subsidiary Grenadian General Insurance Company Limited contributed $1.8 million after elimination of inter-company transactions to these results, having recorded a comparatively modest increase in gross premium income of 22.9%.

The effective taxation rate this year is 38.8% after recognising the retroactive effect of the removal of the ceiling on Stamp Tax in 2002, referred to in a previous report as a regressive measure.
The Directors have declared a dividend of $1.50 per share (2004-$1.00) or 30.4% of the earnings per share of $4.94.

In accord with IAS 10 the dividend is not included in the current year’s financial statements.

As is fully disclosed in notes 2(c) and 13 to the Financial Statements, depreciation is now charged on buildings in compliance with IAS 4, following a professional revaluation of the company’s properties, which resulted in a surplus of $32.6 million.

When combined with the year’s very satisfactory financial performance, total shareholders’ equity has increased by 72% and the book value of an ordinary share is now $61.23.

$5.7 million has been spent on the Carenage building project, which experienced the delays that have become typical in the construction industry due to disruptions in supply and labour shortages. It is currently projected for hand-over at the end of February 2006.

In September, new point-of-sale systems were introduced at Building Supplies and reactions from employees and customers alike has been positive. We have been working with our main bankers FirstCaribbean International Bank, to install credit/debit card machines at every terminal in our business as the retail environment develops.

A new collective agreement with the Grenada Commercial and Industrial Workers’ Union for the period February 2005 to January 2007 was signed in August, with salary increases as under:-

Up to $700 per
From $701-$1,400 per month
From 41,401 -$2,400 per month
Over $2,400 per month

Mr. R.A. Smith O.B.E retired from the Board in October, after 33 continuous years of service. He was the last of the generation of Directors who presided over the transformation of Hubbard’s into a publicly owned corporation in 1978.

The casual vacancy arising has not yet been filled. In furtherance of current best practice of corporate governance, Mr. A. H. Bierzynski resigned as Chairman of the Board, and was replaced by Mr. I. A. Alleyne.

A compensation Committee has supplemented the Audit Committee of the Board that was established in 1998. The Board has also decided to establish a dedicated Human Resource Department, to co-incide with the relocation of the administrative function from Middleton House to the new Carenage premises in 2006.

We cannot expect that the level of economic activity from which the company benefitted in 2005 will continue throughout the current fiscal year. Indeed, the shortage of cement experienced over the last several months has already impacted negatively on our important building materials department.

Additionally, external market conditions have contributed to increased local operating costs, particularly insurance, electricity and vehicle expenses. In this environment, it is imperative that the private sector, unions, and government are all reading from the same page in order to develop a consensus as to the implementation of existing and additional necessary fiscal measures to widen the tax base, encourage taxpayer compliance, and tighten collection efforts in the known areas of revenue leakage.

Directors, Managers and employees all contributed to our performance for 2005, and take this opportunity to express their thanks for the continuing support of the loyal customers and shareholders who made it possible.