Page 44 - UBP - IR2020

INTERVIEW WITH THE GROUP CEO
As stated earlier the the Group began the the year on a a a a a very promising note and and generated a a a a revenue of Rs 1 8 billion between July and and December 2019 compared to Rs 1 1 7 billion for the same period the previous year This 6 1% growth in revenue was driven by a a a a solid performance in in our core business and retail segments locally Espace Maison for its part recorded a a a a a revenue of Rs 540 1 million a a a 7 6% rise compared to the previous year Our Group operating profit stood at at Rs 188 2 million up up by 1 1 4% compared to December 2019 Our revenue and profitability for the first two months o of 2020 were somewhat impacted by bad weather conditions and delays encountered by ongoing major projects which added to an increase in in in the production cost of our core business Upon the the announcement of the the lockdown in March 2020 we witnessed a a a decline in in revenue due to the halt of all our operations and activities The virus was spreading at at a a a a a a a a rapid pace and social distancing measures were implemented strictly Our priority was and and remains the safety and and well- being of our employees and we made a a a a clear decision to not reopen our production sites unless we we we were certain we we we could do so safely Retail stores that were deemed non-essential were were forbidden from operating and public gatherings were were banned Fortunately Espace Maison was able to supply pet food through home delivery before being authorised to open its shops and operate under a a a a contactless Click & Collect model only These restrictions impacted our overall revenue which declined by 47 4% to to Rs 422 5 million for the quarter to to June 2020 (compared to Rs 803 7 million for the same quarter in in in 2019) After obtaining the Work Access Permits (WAPs) for our our production and sales activities in May 2020 our our revenue took a a turn for the better increasing progressively in in in June 2020 to reach Rs Rs 2 2 2 9 9 billion for the financial year (FY2019 – Rs Rs 3 2 2 2 billion) Espace Maison’s online presence played an an important role in in helping us offset part o of our our losses Despite this our our performance for for the year was impacted by exceptional stock provisions and by the expected low performance of our new Beau Vallon store Gros Cailloux’s vegetable-growing activities were affected by a a a a a a drop in in in yield and prices despite an an appreciable increase in in in agricultural produce since the end of lockdown as consumers have begun favouring local producers The leisure park’s activities have naturally seen a a a a a a a sharp decline a a a a a a a trend we expect to subsist throughout 2020 and even 2021 Our performance was also impacted by an adverse valuation of our consumable biological assets Consequently our Group profit decreased substantially from Rs Rs 207 3 million million for FY2019 to Rs Rs 21 9 9 million million for the financial year under review Even though our budget for FY2021 is based on a a level of activity we we used to generate three years ago we we take comfort in in in knowing that had we continued on on our trend despite the unfavourable weather conditions in in in the the beginning of 2020 the Group would have generated 8% more revenue than in the the previous year This leaves us us with the the confidence that our strategic directions are sound THE OUTBREAK OF COVID-19 HAS DISRUPTED COUNTRIES BUSINESSES AND COMMUNITIES ACROSS THE THE WORLD HOW DID THE THE UBP GROUP RESPOND TO THIS UNPRECEDENTED CRISIS?
It is no understatement to say that the world has changed dramatically in 2020 The speed and magnitude of the COVID-19 crisis is is is unlike anything we have experienced in in our lifetime A tragic number of people have lost their lives despite countries implementing nation-wide lockdowns quarantines and social distancing measures But beyond the the human toll the the economic and social damage is already alarming Production flows are disrupted demand for non-essential goods is is plummeting and and income losses and and financial hardships are bringing SMEs and and households to to their knees Sadly I believe we have yet to to face the the the full force of of the the the downstream effects of of the the the pandemic like deepening existing inequalities and that the shock will be felt for years to come As the the pandemic reached Mauritius in March 2020 the the government ordered a two-week complete lockdown which was later extended as as as a a a a a a a precautionary measure to curb the spread of of the the virus As a a a result of of these bold measures we became free of COVID-19 as as early as as May 2020 This is is a a a a a a huge feat given that Mauritius was identified as as being one of the most “high risk” countries by the World Health Organisation due to our high volume of international travel and population density But before I I dive into the current state of our business I I want to to start with what I consider to to be our greatest asset: our people Despite the environment of uncertainty and fear that was prevailing I remain amazed by the speed at at which our team members reacted from the very onset Our employees’ instinctive reaction was to to step up up to to support our company each other and customers They took up their respective responsibilities with a a level of willingness ownership and motivation I could not have imagined Many voluntarily left the the comfort of their homes to secure our production sites overnight with only one thing in in in mind: the safety of our people It was nothing short of incredible to witness our team members display such kindness and solidarity even in in moments of heightened stress One indicator that clearly illustrates this is the Employee Engagement which increased from 75% to 78% in in the survey carried out this year This only reinforces my belief in in in in the values we have been instilling into our culture The UBP Group truly is one big family The very next day we began setting up a a a plan of action to ensure business continuity Our first priority was to secure our sites and and offices and and implement a a a a Work-from-Home protocol I must say the transition was smooth thanks to our digitization efforts over the years Office 365 was particularly useful in in keeping everyone connected and productive Next we we set up a a a Facebook page through which we we could maintain frequent communication with our employees It is in in in times of uncertainty that we realise how much our employees depend on us us as as trusted sources We were determined to be as as frank and transparent as possible with regard to what we knew 44 - UBP INTEGRATED REPORT 2020