Seprod CEO Richard Pandohie (left) engages in conversation with Michael Subratie (right) as Musson Group Chief Investment Officer Nicholas Scott looks on. (Photo: Joseph Wellington)
Seprod Limited intends to list its recently acquired subsidiary AS Brydens & Sons Holdings Limited on the Jamaica Stock Exchange (JSE) later this year and subsequently on the Trinidad and Tobago Stock Exchange (TTSE).
Seprod acquired Trinidad-based AS Brydens & Sons Holdings Limited on June 6 in a landmark regional transaction that will see the enhanced group generate combined revenues in excess of US$500 million ($76.12 billion) or TT$3.37 billion. AS Brydens has three main operating subsidiaries, namely AS Brydens & Sons (Trinidad) Limited (ASBT), Bryden pi Limited (Bryden pi) and FT Farfan Limited (FT Farfan). It was founded in 1923 and is a leading distributor of food, pharmaceuticals, hardware and industrial equipment in Trinidad and Tobago, Barbados and Guyana.
“We are delighted to announce that we are taking the Brydens Group public. We believe in creating a culture of ownership throughout the organisation. The public listing of our shares will allow any member of staff to become an owner of the business and benefit from the value we create together,” reads a September 30 memorandum sent to all Brydens Group staff. The memorandum was signed by Chairman Paul B Scott and Acting Chief Executive Officer Richard Pandohie.
The memorandum says all staff will be offered the opportunity to buy Brydens Group shares before the shares go public. This will be facilitated by salary advances to staff members. Further information on the opportunity, including how staff can apply for the salary advance, was attached in the documents and links sent in the email to staff with any questions for the manager respective human resources.
“AS Brydens is expected to initially list on the Jamaica Stock Exchange (JSE) before the end of the year, listing on the TTSE will follow at a later date to be announced,” Pandohie said in an email. Jamaica Observer. Pandohie is the CEO of Seprod.
Pandohie confirmed that Seprod owns 60% of the Brydens Group, with the rest held by other partners, including the management team. The former owners of the Trinidadian retail giant were the Bryden, Fitzwilliam and Maingot families, as well as Summit Investments, which was a company profit sharing scheme.
The cost of the acquisition was not disclosed, but Trinity Express The newspaper reported on May 8 that the acquisition was partially funded by a US$25.4 million bond issue. The two-year bond is unsecured and pays a six percent interest rate with a bullet payment in May 2024. CIBC FirstCaribbean International Bank released a tombstone stating it was the mandated lead arranger , the administrative agent and co-lender in June 2022. for a senior secured syndicated loan in two currencies to help Seprod acquire AS Brydens & Sons Holdings.
Seprod’s consolidated revenue for the second quarter increased 56% from $10.25 billion to $16 billion, with consolidated net profit increasing 49% to $984.37 million. Seprod’s net profit attributable to shareholders was $883.63 million while non-controlling shareholders’ share was $100.75 million. This means that AS Brydens’ contribution in less than a month to net profit was $251.87 million, which is $3.02 billion on an annualized basis. Seprod’s revenue was $37.74 billion in 2020, with adjusted net income of $2.12 billion. Its revenue in 2021 was $43.88 billion or US$283 million.
Seprod’s total consolidated asset base at the end of March was $45.79 billion, with total liabilities and shareholders’ equity of $21.72 billion and $24.06 billion, respectively. Seprod’s consolidated asset base was $78.07 billion with total liabilities and shareholders’ equity of $47.88 billion and $30.18 billion, respectively. The non-controlling interest of $2.57 billion recognized upon acquisition of the subsidiary means that AS Brydens’ equity base was $6.43 billion.
“It’s a transformation for Seprod,” said Nicholas Scott, chief investment officer (CIO) of the Musson Group.
Asked why take AS Brydens public after acquiring it less than four months ago, Pandohie said: “Seprod is a publicly listed company, and ASB was always expected to be listed listed as part of the Seprod group Seprod has a long and strong culture of employee ownership, listing ASB will also give its employees the opportunity to own a share of their company ASB is a strong company with nearly of 100 years of Trinidad heritage, we believe employees and investors alike will be excited about the opportunity to own a piece of this exciting entity.”
In his presentation to shareholders at the company’s hybrid annual general meeting held recently at the Jamaica Pegasus Hotel, Pandohie said, “Our ambition is to create a regional platform designed to reduce complexity logistics ; create a scale that justifies higher level investments; become a more attractive company for the best talents and be a partner of choice for major brands. In short, we have built a platform that makes this group one of the most exciting and value-creating entities in the region,” said Pandohie.
The listing of AS Brydens on the JSE would represent the continuing trend of Trinidadian businesses choosing to list over the past couple of years. Guardian Holdings Limited elected to re-list on the JSE in May 2021, while Massy Holdings Limited listed in January 2022 to become the second largest company on the JSE. There is also talk of another TTSE-listed giant considering listing on the JSE.
Although the broker is currently unknown, NCB Merchant Bank (Trinidad and Tobago) Limited and JMMB Securities (T&T) Limited have parent brokerage firms in Jamaica. NCB Capital Markets Limited (NCBCM) facilitated Facey Group Limited’s offer for sale in October 2018 of Seprod shares. NCBCM’s GOIPO platform also facilitates the opening of brokerage accounts in the various jurisdictions in which they operate.
“There were initial concerns about how a Jamaican company would be welcomed, having acquired such a legacy business four months into the acquisition and those concerns proved unfounded. Employees were open and welcoming, suppliers and customers reiterated their support for the partnership and the leadership of government and private sector was supportive. It is still early days, but the synergies identified between Seprod and ASB will generate a lot of value and opportunities, including shareholders, our suppliers and our customers will benefit,” Pandohie said of the integration of the two entities.
While the fire left Seprod with $600 million in additional annualized costs, the group has seen its biscuit factory return to more than 85% production and its logistics fleet is set to start up later this month. Demand for goods has increased in the local market following the removal of COVID-19 related restrictions, with export demand increasing at a similar pace.
“Any business that has operated successfully for the past 40 years in Jamaica essentially has the mindset of operating in recessionary or adverse economic conditions. It is only in recent years that the world has begun to change I think the skills and the level of commitment that we have to cash flow forecasting and planning were formed basically in rather less prosperous times. ideal, but also to enjoy and thrive,” said PB Scott in response to a question about a recession at the AGM.
Seprod will host an investor briefing tomorrow at 4 p.m., where Seprod’s Chairman and CEO, Musson’s CEO and CIO will answer questions posed by investors. Seprod’s share price closed the quarter at $67.39, leaving it up 4% year-to-date with a market capitalization of $49.43 billion. Seprod shareholders will also receive a $0.50 dividend next Wednesday.
“In summary, the Seprod Group is in a good position. We have made significant progress in our transition from a local player to a regional player. Over the next 12 to 18 months, the focus will be on updating our growth and value through the drivers I described earlier. While we are pleased with our progress, we are far from where we are going. We all know that our Chairman, PB, is committed to creating value and it is truly a privilege to be part of his team,” concluded Pandohie.
Seprod CEO Richard Pandohie (center) talks to Chairman Paul B Scott (left) as Seprod Chief Financial Officer Damion Dodd looks on.
Pandohie… the synergies identified between Seprod and ASB will generate a lot of value and opportunities (Photo: Joseph Wellington)