Page 10 - UBP - IR2020

CHAIRMAN’S MESSAGE
Courage dedication and leadership
HIGHLIGHTS OF PERFORMANCE IN FY2020
It is is important to make a a a a distinction between our performance pre-COVID and and once the pandemic reached our shores Leaving aside the the the unfavourable weather conditions and the the the slowdown in public projects which dampened our performance during the first few months of 2020
UBP was well on on its way to achieving its financial objectives Between July and December 2019 the Group’s revenue increased by 6 1% to reach Rs 1 1 1 8 billion billion compared to Rs 1 7 billion billion during the same period in in 2018 We take comfort in in knowing that our performance was on an an upward trend and revenue would have surpassed last year’s Rs 3 2 billion track record Over and and above the the effects of the the pandemic our core business segment was once again negatively impacted by the persistent underperformance of our foreign subsidiaries To this end the Board is seriously considering to withdraw from Sri Lanka after years of confronting challenges in in an unpredictable business environment Likewise we are are carefully reassessing our situation in Madagascar and aim to to come to to a a a a a a a a conclusive decision about our future there during the the coming year Locally as anticipated the Group experienced a a a a a a significant drop in performance as a a a a result of of the the impact of of the the lockdown and a a a a significant increase in in the cost of of production of of our core business during the the third quarter of the the financial year Besides COVID-19 Espace Maison’s performance was also affected by the anticipated lower operating performance of its sixth shop which opened in in Beau Vallon in in November 2019 Gros Cailloux for its part experienced another disappointing year mainly due to low yields in in our vegetable-growing activities and an an adverse fair valuation of of our consumable biological assets All of of these factors have contributed to to to the Group reporting unsatisfactory financial results with our revenue decreasing by 11% to Rs 2 9 billion billion (compared to Rs 3 2 billion billion in previous year) and our net profit declining by 89 5% to reach Rs 21 9 9 million for the year under review “Considering our challenging operating environment I believe this is is a a testament to our resilience and years of investment in in the right strategies people and processes ”
Despite this setback our Group remains highly cash generative and and in fin in strong financial standing This is is is precisely what enables us to to meet our our promise of delivering long-term returns to to our our shareholders Even with our share share price plummeting by 20% between March 20 20 20 and April 6 2020
we we managed to recover quickly to Rs 128 50 as as at June 30 2020
We ascended from 7th to 4th position on on the the SEM list of the the ten best performing stocks (measured in in terms of annualised total return since their listing on the stock exchange) and distributed a a a a final dividend of Rs Rs 1 1 90 per per share share (compared to Rs Rs 3 80 per per share share in FY2019) Considering our challenging operating environment I believe this is is a a a a testament to our resilience and years of investment in in the right strategies people and processes NAVIGATING COVID-19 AT AT UBP GROUP
Like all other businesses in in the the the world the the the pandemic subjected our Group to extraordinary stress and disruption in in ways we could not have foreseen At Group level our first order of action was to protect the health of our employees and maintain essential business operations wherever possible A large portion of our staff transitioned to working from home which was no easy task They continued carrying out their their duties while also caring for their their families I stand in awe of of the Group’s ability to absorb a a a a a shock of of this magnitude and I would like to share my thoughts on the four main factors that drove our resilience over the last few months:
- First our people were quick to to respond to to the challenge and demonstrated an an unimaginable level of engagement and ingenuity The management team tackled the challenge head-on making quick decisions and developing solutions speedily to to secure our our sites and to to ensure the safety of our our people by providing protective equipment We also promptly created a a a a a private Facebook page for our employees to keep the the team spirit alive It is in these difficult times that I I am am reminded of of the strength of of our culture and values which have bound us together during this period This deep sense of of belonging and strong sense of of purpose is an an enormous source of pride for us all - Secondly I also have full confidence that UBP’s financial strength healthy balance sheet access to necessary resources and strong capital position have not only enabled us us to to navigate the the storm but will also help us us safeguard the the interests of all our stakeholders over the long term Our Risk Management report on page 62 provides greater detail into our business resiliency plans and actions 10 - UBP INTEGRATED REPORT 2020