Banks DIH’s shareholders will be receiving a special interim dividend due to the sale of its shares in Barbados beverage conglomerate Banks Holdings Limited (BHL) and Chairman Clifford Reis told shareholders yesterday that a deal with the buyer would also see the company getting access to manufacture almost two dozen more beer brands.
During his address at the company’s Annual General Meeting at Thirst Park, Reis told shareholders that on February 15 of this year they will receive a dividend of $0.60 on each share that they own at a total cost to the company of $600M.
This represents 50% of the net gains from the sale of BHL shares last year.
In its annual report, the company noted that “on 02 December 2015 the Com-pany sold its holding of ordinary shares in Banks Holdings Limited, which amounted to 4,358,815 ordinary shares or 6.7% of the issued share capital of that entity to SLU Bever-ages Ltd. The transaction was carried out on the Barbados Stock exchange at a price of Bds$7.10.”
Reis explained that this represented a net gain of $1.147B.
In a statement in December on the sale, Banks DIH said it was both “financially and commercially advantageous” and would increase shareholder value. The sale was seen as key to a takeover of BHL by Brazilian beer giant AmBev, ahead of Trinida-dian conglomerate ANSA McAL which was also seeking control of the company.
Speaking with reporters after the meeting yesterday, Reis noted that the interim dividend is in addition to a $0.35 final dividend being paid to shareholders.
Pressed by shareholders to explain the reason for the sale of the BHL shares and to say whether Banks Guyana was for sale, Reis was emphatic in declaring, “No! Banks Guyana is not for sale.” He maintained the position that the sale of the shares was “financially and commercially advantageous.”
According to Reis, a partnership with Brazilian AmBev Group of Companies of which SLU Beverages is a subsidiary, will grant the company access to the 20 beers for which the companies holds trademarks.
“Guyana needs a premium beer at a reasonable price and you’ll get that reasonable price if you manufacture locally,” Reis said.
He explained that SLU Beverages owns beers such as Corona, Skol, Brahma and Bex. Of this variety, it is expected that “Barbados will manufacture some and we will manufacture some locally, then we will exchange,” Reis said.
He also shared that the company had been in discussions with AmBev eight years ago to package and distribute the German Beer, Bex but a merger between that company and Budweiser saw that deal stall.
“This sale allows us certain choices. Can you imagine being able to manufacture Brahma, which is a Brazilian beer? Consider-ing the number of Brazilians in Guyana, that is a large market,” Reis explained.
He also said that the deal with AmBev allows for “enhancement of employee training as well as further upgrading of production methods.
“The same way we benefit from Coca Cola. Employee get chances for training in several areas. You as a small company might not be able to pay for these trainings but partnership with larger companies give you these options and just as we were able to improve the I-CEE brand using what we learned from Coca Cola, so too can we improve our beers from what we learn from AmBev,” Reis said.
Reis also shared with shareholders recently successful efforts to break into the North American market.
A partnership with importer/distributor Royal Wines has seen the company deliver two shipments of its various rums for sale in the New York area.
Reis noted that with the success of these shipments the company is now moving to distribute Guyanese Rums such as XM brand in Virginia and Florida.
The company has registered a profit of $2.569B for last year, a 13% rise over the 2014 figure. A similar increase was registered in the Group’s net asset value per share, which rose from by 10% $25.9 to $28.6. Conse-quently, the Group has upped its dividend proposal to shareholders to $0.69 per share. The Board of Directors declared a first interim dividend of $0.17 per share, which was paid on May 28, 2015, a second interim dividend of $0.17 per share which was met on October 22, 2015, and a final dividend of $0.35 per share unit which will be paid on January 25, 2016.
With the addition of this special dividend, shareholders will receive a total $0.95 on every share within the first two months of 2016 at a cost to the company of $950M.
Despite these seemingly impressive figures, Reis would not declare the company’s performance as outstanding. Outstanding, he said, “is when you get to 20% and these number. The company did good to pass the 2014 figures. We had a good year. I won’t say it was outstanding.”
