LES GAZ INDUSTRIELS LIMITED
ANNUAL REPORT: 2015-06-30
Dear Shareholders,
The Board of Directors of Les Gaz Industriels Ltd (LGI) is pleased to submit its report for the year ended June 30, 2015.
This financial year has again been a challenging one for our Group. The tough economic conditions and the even more competitive market conditions have negatively impacted on us and our main business partners. Although the Mauritian economy has witnessed a timid growth of 3.6%, private sector investment is down by 3.6%. The medical sector has been rather stable as compared to last year.
In line with our objective to create the conditions for long term sustainability of our Group, the implementation of our state of the art oxygen and nitrogen plant is now fully completed.
The current economic conditions in Madagascar are also impeding on the performance of our subsidiary and that market is proving to be more challenging than expected.
We however remain committed to reinforce the position of LGI in its markets whether in Mauritius or in the region.
BUSINESS REVIEW
Group revenue decreased to Rs. 115m in 2015 (2014: Rs. 119m) representing a decrease of 3%. Our exports in the region have been much lower than last year. However, on a positive note, our local sales have picked up.
Our costs have increased mainly due to a provision for doubtful debts of Rs. 10m made during 2015. Group profit after tax was at Rs. 2m (2014: Rs. 13m). The net asset value per share of the Group increased from Rs 89.59 to Rs 90.28 during the financial year 2015.
SHAREHOLDER RETURN
Despite the decrease in revenue during 2015, the financial health of LGI remains good. The Board has declared a final dividend of Rs 1.50 per share payable in November 2015. The share price of the Company fell from Rs 121.00 per share in June 2014 to Rs 105.00 per share in June 2015. This therefore generated a dividend yield of 1.43% in 2015 as compared to 2.48% last year.
THE BOARD
Mr Jerome Commins after 5 years as Managing Director of LGI has submitted his resignation in April 2015. The Board wishes to thank Mr Commins for his contribution to the Group.
Mr Christopher Hart de Keating has been appointed Executive Director of LGI, as from July 2015. He brings more than 12 years of experience in different senior management positions in a number of industries (construction, textile and distribution).
Christopher Hart de Keating holds a ‘Maitrise Audit et Contrôle de Gestion’ from the University of Paris Dauphine.
Our main shareholder and technical partner Afrox has decided to renew its directors on the Board. Consequently, Mr Willem Coetzee and Mr Jonathan Narayadoo, two NonExecutive Directors, have resigned from the Board in April and July 2015 respectively. Mr Mark Brett Wheatcroft and Mr Marius Kruger have replaced them. The Board wishes to thank Mr Coetzee and Mr Narayadoo for their positive contributions during these past few years. Their advice and guidance were much appreciated. We are confident that the extensive knowledge of the gas industry from the new Board members will be an asset for the Group.
CORPORATE SOCIAL RESPONSIBILITY
Despite the difficult economic conditions, we have remained active in our local community again this year. Our employees and neighbours did not miss out on our annual neighbourhood cleaning up campaign and they enjoyed our annual lunch for senior citizens living in the adjacent regions. We will maintain and increase our involvement in the community of the region where we operate, in tune with our commitment to social integration and sustainable development.
SAFETY, HEALTH, ENVIRONMENT AND QUALITY
Safety, Health, Environment and Quality are important considerations for most successful organisations but are critical for the survival of organisations like ours. We decided to set up a new sub-committee in 2013 to overview all Safety, Health, Environment and Quality (SHEQ) matters. The Company adheres to the highest levels of best practice and strictly complies with the rules and regulations in its different areas of operation.
OUTLOOK
LGI will continue to operate in an economic environment characterised by a low growth rate both locally and regionally.
LGI has started to implement its new business strategy for long term business sustainability and will focus on improving its operational efficiency while focusing on developing its product and customer portfolio.
APPRECIATION
The Board of Directors would like to thank the management of LGI and its staff for their dedication and commitment to the Company.
The qualities of that team represent an asset for maintaining and enhancing our performance despite the tough challenges that await us. On behalf of the Board,
Antoine L Harel
Chairman
30 September, 2015