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UBP INTEGRATED REPORT 2022
INTRODUCTION ABOUT US
GROUP CEO’S MESSAGE
A YEAR OF OPPORTUNITIES
How would you sum up UBP Group’s performance for the FY2022 in a few words?
UBP Group had what can only be described as an action-packed year. I am afraid that reducing our performance to a few words would not do justice to all the happenings and accomplishments that took place during the year.
In hindsight, it would be fair to say that FY2022 marked a turning point in the Group’s history, or a ‘foundation year’, to use a term from the industry jargon. I have no doubt that, years from today, when we reflect on UBP Group’s many milestones, this past year will go down in our history as Year Zero of a new era of growth. One of those pivotal moments that will shape the course of our history.
This new chapter in our growth story is rooted in a significant event: our decision to acquire all the shares of LafargeHolcim Mauritius into Pre-Mixed Concrete Limited (‘Premix’), which is today 100% owned and controlled by UBP Group. For reasons beyond our control, this transaction had to be made through the unilateral exercise of our right of first refusal at an exorbitant and non-negotiable price, rather than through sound and fair negotiations. Nevertheless, this highly strategic acquisition was the largest contributor to the Group revenue during the year, which increased by 22.4% to reach almost Rs 4 billion, while also providing us with the missing link to position UBP Group as a leading solutions provider for the construction industry.
Through this same transaction, we increased our stake in Drymix Ltd (‘Drymix’), ramping up our majority shareholding and controlling interest from 54.6% to 71.8%. This acquisition
reflects our clear stance with regard to Drymix and is a strong statement of our confidence in the future of this subsidiary. Should we achieve the targets set out in our new ambitious strategic plan, I have no doubt that once again, FY2022 will become known as a milestone year in our subsidiary’s history.
With our expertise in concrete under the banner of UBP Group, and our reinforced position in Drymix, expert in mortar, the Group’s building materials segment - now composed of UBP, Drymix and Premix - is well positioned to serve as the go-to supplier for Mauritian builders seeking quality products that comply with high standards. In line with this ambition, the three companies’ sales forces have been brought together to secure cross-selling opportunities, and a Customer Care Centre was set up to deliver a consistent customer experience across all three entities.
By far the most consequential event that lends FY2022 its status as a breakthrough year, is the signing of a Share Purchase Agreement for the takeover of several companies in Reunion Island operating in a similar line of business. These companies, which form part of Capriona Group, are all experts in their respective fields and well-established in the construction landscape in Reunion. Should this acquisition materialise (we expect to close the deal in the first semester of 2023, subject to the satisfactory completion of conditions precedent), UBP Group will cement its position as a key regional player in the construction industry. This will mark a significant step in the development of the Group, not to mention that our growth figures are likely to be monumental.
Lastly, I would like to mention a fourth event, which in my view holds more symbolic meaning than the above: during the year, we renovated our Head Office in Trianon, equipping it with modern and sustainable feature to ensure that it meets our needs today, while also measuring up to the challenges that lie ahead of us in terms of work environment and employee wellbeing. This renovation illustrates our preference for renewal and building on existing foundations, rather than demolition, and in a way, serves as the physical representation of our transformation into a modern and purposeful business.
Did the Group’s financial results reflect the achievements of this ‘breakthrough’ financial year, as you have just described it?
Despite a noteworthy increase in revenue following the consolidation of Premix as a subsidiary, profits did not quite keep pace. From the onset, I would like to point out that UBP Group’s performance for FY2022 was substantially impacted by an adverse event that is, on no account, related to the activities of the Group’s subsidiaries. I refer to the exceptional Rs 340.7 million impairment cost we incurred in the wake of our 100% acquisition of Premix to comply with the increasingly stringent requirements of business accounting standards, which according to me are not applied with sufficient coherence. (As a disclaimer, these opinions are solely my own, as a non-accountant, and do not reflect the views of anyone else within the Group.) With this in mind, our Group posted a net loss of Rs 56.7 million for the period under review.
MANAGEMENT APPROACH