Calling it “an exciting business, a great company with great potential,” Commonwealth Brewery Limited Chairman Julian Francis delivered welcome news of solid performance including revenue of $124.2 million and plans for growth during the company’s fourth annual general meeting June 16 at the British Colonial Hilton.
“Commonwealth Brewery Limited is a great company with a great history and great potential. I am very confident that we will take this company to the next level,” said Mr. Francis, noting that the nation’s largest manufacturer and distributor of spirits, wine and beer was a debt-free company with ownership that included more than 3,000 Bahamians.
Though much of the tone of the shareholder meeting foreshadowed what CBL would undertake in the next five years to ensure success in an increasingly competitive market, it was the reporting of fiscal 2014’s numbers that shareholders gathered to hear and they were not disappointed.
Revenue increased $5 million from $119 million in 2013 to $124 million in 2014, a hike of 4.2%, net income stood at $18.2 million, earnings per share were $0.61 and the company paid $18.3 million in dividends.
“The business environment in The Bahamas in 2014 was challenging,” said Hans Neven, Managing Director. “Despite a difficult environment, your company did well.” Sluggish market conditions in the first half of the year were offset by a substantial increase in the latter half largely, Neven said, as a result of the introduction of new products and successful promotions.
Investments of $2.9 in 2014, Neven said, increased by 70% compared to the previous year, confirming the brewery’s “commitment to the Bahamian economy,” an economy to which CBL contributes significantly accounting indirectly for 2% of the GDP force and 3% of the labour force. Investments in physical plant, skills training and accident prevention, executives said, would continue to be made over the next 3-5 years as ambitious and major revitalization efforts transform its 51 stores. Those efforts will extend CBL’s retail footprint and revolutionize the retail experience for local consumers, businesses and visitors. Internal changes to build teamwork and inspire innovation are also on the drawing board. Already the first Bahamian, Barrington Archer, has graduated from the Heineken Graduate Program, having completed intensive training for two years in Amsterdam, Nigeria and Mexico. The local CBL Education Fund provides $50,000 in scholarships to students at The College of The Bahamas.
“At Commonwealth Brewery, we believe it is important to create a balance between people, profit and planet and that long term growth comes in a responsible way,” said Neven, whose several references to evolution and transformation delivered a message that the company that had won awards and accolades and held major market share would not rest on its laurels with competition knocking on its doors.
Highlights of the company’s recent evolution ranged from its rebranding with new look and logo to the launch of new products, including Kalik Radler, non-alcoholic Kalik Radler 0.0% and Fayrouz.
CBL’s recipe for operations is reaping success on several fronts. One of the brands brewed at its Clifton Pier facility, Guinness Stout, was again awarded the Guinness Excellence Award for the third time and the brewery named the best of 12 manufacturing plants in the region. Kalik continued to outsell all other beers, Kalik Radler, a 2% alcohol beer, became the year’s fastest growing beer in sales, Heineken introduced its 250 ml bottle, CBL expanded its label offerings and now carries more than 200 brands. And CBL, which is 75% owned by Heineken, continues to be the largest manufacturer and distributor of spirits, wine and beer by a large margin.
Those numbers and the upward trend helped drive share value which shot up 75.3% in the four years since the company went public in 2011. At that time, shares were offered at $8.33. Yesterday they were trading at $14.60.
Despite rising labour costs, the introduction of Value Added Tax on January 1 and the delayed opening of Baha Mar, CBL said revenue in the first quarter of 2015 was up 5.6%, foreshadowing a good year even before the opening of the much-anticipated mega-resort. The first months of 2015 also saw CBL boost its profile sponsoring major events hosted by The Bahamas including the IAAF Relays and Bahamas Junkanoo Carnival. Marketing Director Lino Villareal noted that those promotions and partnerships served to further cement the strong cultural bond between Kalik, the Beer of The Bahamas™, and The Bahamas.
Shareholders rewarded the company that had rewarded them, returning all directors for another term. Those directors include Julian W. Francis, Hans Neven, Edward A. Fields, Dennis T. Hanna, Radovan Sikorsky, Eugene Ubalijoro and Cecile S. Williams-Bethel.