The First Half of the 2023 Financial Year was a very important period for the Massy Group strategically, financially and purposefully. Strategically, the Group set out in 2019 to divest non-core businesses and assets and to focus future investments in its core Portfolios (Integrated Retail, Gas Products and Motors and Machines). Furthermore, at its Annual Strategy Retreat in 2022, the Group declared a bold new vision: “A Global Force For Good, an Investment Holding Company with a Caribbean Heart”.
In the First Half (“HY”) of 2023 the Group has initiated the redeployment of capital released from divestments in transformative acquisitions in its core Portfolios.
In December 2022, the Group acquired Rowe’s IGA supermarkets in Jacksonville Florida for US$47 million. Rowe’s acquisition is a major step in achieving the Group’s global vision and provides an excellent beachfront for further niche supermarket acquisitions in the South East United States. In January, the Group acquired Air Liquide’s operations in Trinidad for US$57 million consolidating the Group’s position as the leading industrial gas manufacturer and distributor in the region with additional export opportunities to be tapped. In December 2022, the Group announced the signing of a Share Purchase Agreement (SPA) to acquire IGL Jamaica for US$140 million, which will consolidate the Group’s position as the leading LPG business in the region and provide access to additional economies of scale to bring efficiencies to consumers. We are still working with the Jamaica Fair Trade Commission (FTC) to get approval for the transaction; and we expect the transaction to close in Q3 2023.
Financially, the Group continues to perform commendably. The Group’s Third Party Revenue from Continuing Operations grew by 11% for the HY 2023 to $6.8 billion (US$1 billion). This was propelled by 16% Revenue growth from the IRP, which is benefiting from its acquisition of the Rowe’s IGA supermarkets in December 2022. Group Profit Before Tax (“PBT”) from Continuing Operations grew by 17% to $520 million (US$77.2 million) and Group Profit After Tax from Continuing Operations increased by 19% to $354 million (US$52.5 million) with a slightly lower Effective Tax rate of 32% compared to 33% in the prior HY.
Strong PBT growth in the Integrated Retail Portfolio of 20% and Motors and Machines Portfolio of 11% compensated for PBT decline in the Gas Products Portfolio of 11% in HY 2023. The rebalancing of the Divestment Funds Portfolio (DFP) and higher interest rates in the US facilitated significant improvements to the DFP and the TIRCL reinsurance business performance. In HY 2023, the DFP produced a gain of US$2.6 million versus a loss of US$1.4 million in the prior HY, a US$4 million swing. TIRCL PBT for HY 2023 was US$1.6 million versus a US$429K loss in the HY 2022, a US$2 million swing.
Purposefully, the Group is taking the opportunity to live out its Purpose through its celebrations and engagement initiatives around its 100 Year Anniversary (Our100). On February 1st 2023, the Group celebrated its 100th Anniversary. This is a significant milestone for the Group. Throughout our 100-year journey, the lessons we’ve learned along the way, our successes, and the mistakes we’ve made, have all helped us grow and shape who we are today. We have seen that our approach of love and care, tapping into our “Caribbean Heart”, with a disciplined focus on our three main portfolios results in stronger engagement and leads to greater prosperity for all. As part of marking Our100 we have recommitted to an Employee Ownership initiative to ensure that all Massy employees are given an opportunity to own shares in the Group. In Jamaica, all employees were already granted a gift of US$100 worth of Massy shares; the response has been tremendously encouraging. Our100 also includes “Forces For Good” impact initiatives in which employees will be encouraged to submit proposals to support charities with cash, goods, skills and volunteers to significantly scale the impact of the charity’s work.
This is my last Massy Holdings Ltd. Chairman’s Statement. I have served as a Director on the Massy Holdings board for the past 26 years. I am grateful to have had the opportunity to serve with many outstanding executives and directors. I have witnessed great successes and some failures during my tenure on the MHL Board. I retire from the position of Chairman with great pride in what the organization has achieved over the years and in its ability to stay resilient. I wish to take this opportunity to acknowledge the great work of all Massy’s past employees and leaders and thank all our current staff, executives, customers and suppliers for their commitment and dedication. The Group would not have survived for 100 years and certainly would not be in this position of fortitude for another 100 years of purposeful growth without you all.
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