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UBP INTEGRATED REPORT 2022
INTRODUCTION ABOUT US
GROUP CEO’S MESSAGE
A YEAR OF OPPORTUNITIES
Sincethis‘IFRSperformance’isunrelated to our core activities, and therefore presents neither a fair nor a faithful reflection of actual events, I would like to instead draw your attention to our ‘on-the-ground performance’. Notwithstanding this one-off IFRS cost, the Group’s consolidated financial results for FY2022 failed to meet our initial budget of June 2021, as well as the revised forecasts set in January 2022, leading me to describe this year’s performance as disappointing.
That said, these consolidated financial results are no more than the combined fortunes of our different subsidiaries, and do not offer a full picture of the progress made by our businesses during the year. This is why I believe it is worth offering a more detailed overview of our activities for a more informed assessment of the Group’s performance.
I must begin by commending the excellent performance of our subsidiary Espace Maison Ltée (‘Espace Maison’). With a revenue exceeding one billion rupees for the very first time, and a net profit of Rs 54.2 million, Espace Maison had the best year since its inception. This achievement coincides with its 20th anniversary in November 2022, making this milestone more meaningful. This remarkable performance is no lucky occurrence; rather, it is the result of a year-on-year improvement rooted in a willingness to always meet our customers’ needs, allowing us to offer a range of products and services that are aligned with their expectations. Today, it is safe to say that our customers can find everything they need for their house, garden and pets, and that too, at the right price. It caters not only for individuals looking for stylish decorative items to spruce up the interiors of their home, but also for professional contractors looking to stock up on quality products for their construction sites. Today, the Espace Maison brand is firmly established in the Mauritian economic landscape, as evidenced in the steady increase in the number of customers registered to
our loyalty programmes, Club Espace Maison and Club Espace Pro. In fact, 70% of Espace Maison’s revenue stems from our loyal Club Espace Maison members.
In addition, having learned the right lessons from the previous year, our teams anticipated the disruptions in supply chain and logistics shipping, making the right decisions to prevent any product shortages. This rigorous management of our supply chain was a large contributor to Espace Maison’s performance.
Likewise, the performance of Compagnie de Gros Cailloux Ltée is one of the major highlights on our list of successes for the year. Despite an overall unprofitable year, the losses recorded this year denoted a significant improvement over previous year. We must take into account that Covid-related restrictions reduced the revenues stemming from our events cluster to almost nil, and deeply impacted our leisure and restaurant activities; in contrast, the costs related to preserving employment and the maintenance of the properties remained elevated. Knowing this, the other clusters — nursery, food crops, sugarcane — ended the year with a satisfactory performance aligned with our expectations. With the lifting of restrictions presenting a more favourable business environment, coupled with the implementation of an effective debt reduction plan, I am confident that the company’s return to profitability is imminent.
Let us now turn to the more disappointing results, which concern the three companies within our core business (also known as our ‘Grey’ division): UBP (along with its subsidiaries and associates Sainte Marie Crushing Plant Ltd, Welcome Industries Ltd and Terrarock Ltd), Drymix and Premix. All three were heavily affected, to varying degrees, by the skyrocketing increase in production costs during the second semester of the year. Much of this was related to the maintenance of plant and machinery, coupled with the triple effect of a dramatic increase in the price of spare parts, soaring freight rates and a weakened Mauritian Rupee versus the US Dollar and Euro. The record-breaking increases in the price of diesel were equally detrimental to our core business with respect to our quarrying expenses.
UBP, for its part, suffered from the compounding increase in the price of cement, the main input for the production of blocks, which put pressure on our margins and led us to fall short of the objectives we had set for this activity. And this despite sales volumes reaching record high levels.
In spite of the above setbacks, the Board voted to maintain a dividend per share of Rs 3.00, thus keeping with the Group’s tradition of consistently delivering returns to its shareholders.
Dividend per Share of
Rs 3.00
MANAGEMENT APPROACH