Your Board is pleased to submit the Annual Report of the Group for the financial year ended September 30th, 2009. This shows a significant decline over prior year as, during this period, the Group felt the full brunt of the world economic crisis which negatively impacted on all sectors of the regional economy. Tourism suffered a serious decline in long stay visitors; however, the cruise industry was not as severely affected, though it was not as robust as in previous years. The construction industry continued to be depressed as both private and public sector projects slowed down and increased unemployment levels resulted in a decline in consumer spending.
The sheer magnitude of the crisis has mainly affected our import distribution companies in food and liquor, hardware, building materials and vehicle sales.
As a result, this past year presented many difficulties for our management and has caused us to re-evaluate those products, markets and businesses which add value and provide greater growth opportunities for the Group. We continue to ensure that customer service and satisfaction remain priorities whilst continuously reviewing our cost base. In order to enhance operational performance, we have reduced unnecessary complexity within our businesses so as to seek better value via lower wastage and higher yields. We have focused intently on key drivers and risks across the Group and “Key Performance Indicators” have been set and continuously monitored by our business unit on an ongoing basis.
The contraction in consumer demand has caused group turnover to decrease by 6.9% to $889.0 million; however, we saw gross profit of $279.8 million equating to 31.5% of sales compared to 30.1% in 2008, as a result of better controls over wastage, obsolescence and inventories. Selling, marketing and administration expenses totalled $234.4 million, which represents 26.4% of sales compared to 23.9% last year. We recognise the need to attract and retain customers and are constantly reviewing our administration costs whilst ensuring that selling and marketing costs remain efficient.
Our “core” profit from operations before other gains and losses decreased by 20.6% to $48.9 million over the prior year. Other gains/(losses) - net also decreased by 44.5% to $6.5 million as a result of an impairment charge of $0.8 million against our financial investments, a fair value loss of $0.4 million on revaluation of group investment properties and an impairment charge of $1.1 million against intangible assets.
Share of income from associated companies fell by $3.3 million to $2.2 million, due mainly to a comparative decline in our investment in Sagicor General Insurance Inc., whose 2008 results included a large one-off realised gain on the sale of a portion of its equity investments which was not experienced this year. After deducting taxation and profits attributable to the minority interest, our earnings attributable to the equity shareholders of the Company fell by $20.3 million to $22.6 million, a decline of 47.3% below prior year. This equates to an earnings per share of 38.0 cents (2008 – 73.7 cents).
Turning to the consolidated balance sheet, the current assets to current liabilities ratio has improved from 1.46 in 2008 to 1.55 this year, as a result of our efficient management of inventories and accounts receivable. Our total debt to total assets ratio is well within acceptable financial borrowing limits and has fallen from 40.2% in 2008 to 36.1% in 2009 as a result of ongoing bank term loan repayments and a decision taken during the year to finance expansion solely from internal resources. Our net asset value per share has reached $7.44 compared to $7.29 in 2008, and our quoted share price as at September 30th, 2009 was $6.04 per share which equates to a price/earnings ratio of 15.9 times earnings compared to 10.7 times earnings last year. In addition, our rating agency CariCRIS has maintained our rating at Cari AA- despite these trying times.
The coming financial year will continue to be a challenge for the Group but we are hopeful that we shall see an improved economic environment towards the end of 2010. We shall redouble our efforts in re-engineering and re-tuning our businesses to face the current crisis. Our diversified business operations and wide geographic spread throughout the region will be of great advantage in so doing and we shall re-emerge in a better position to take advantage of the upturn when it occurs, hopefully no later than the end of next year. The economies of the United States and many European and Far Eastern countries are already showing signs of recovery.
The Directors have declared a dividend of 16 cents per common share on the issued and outstanding shares of the Company for the year ended September 30, 2009 which compares to a dividend of 23 cents per common share paid to shareholders for the year ended September 30, 2008. An interim dividend of 8 cents having been paid on August 31, 2009, the Board declared a final dividend of 8 cents per share on the issued and outstanding shares of the Company at its meeting held on December 16, 2009. The final dividend will be paid on February 26, 2010. A dividend cover of 2.4 times and basic earnings per share of 38.0 cents were achieved for the year ended September 30, 2009 when compared to a cover of 3.2 times and basic earnings per share of 73.7 cents for the 2008 financial year.
On August 15, 2009, the Board was saddened to hear of the sudden passing of Sir John Stanley Goddard. Sir John, a former Chairman of the Board and Managing Director of the Company, was first elected a director of the Board on October 4, 1966 and assumed the Chairmanship of the Board on May 27, 1975. Upon his retirement from executive duties within the GEL Group on December 31, 1996, Sir John continued to serve on the Board in a non-executive capacity until his retirement at the close of the sixty-third annual meeting of shareholders held on February 28, 2002. Sir John led a distinguished career in business and was made knight of St. Andrew in 1993. The Board will always treasure the outstanding contribution made by Sir John to its deliberations and to the Goddard Group of Companies as a whole and extends its condolences to Kathleen Lady Goddard and the family of the late Sir John.
In closing, we take this opportunity to thank you, our shareholders, for your continued confidence in the Board’s management of the business and affairs of the Company. We wish too to thank our customers and suppliers for your continued patronage and support in increasingly difficult economic circumstances and to express sincere gratitude to our Group’s management and staff for your service and commitment during the 2009 financial year.