Financial Analysis of Angostura Holdings Limited

Angostura holdings limited is a limited liability corporation assimilated in Trinidad as well as Tobago. Angostura is a holding company whose affiliates are involved in the making as well as the sale of rum in addition to additional spirits, bottling of liquid refreshment liquor in addition to other beverages as well as manufacture and trade of food merchandises (Faria 2013, p. 352). Moreover, Angostura is famous in the making of the realm well-known Angostura sweet-smelling bitters (Hilje 2017, p. 93). Nevertheless, Angostura Company emerged to be the best producers of the aged rums in the Caribbean states (Pino et al.2017, p. 73). Angostura has dominated in the market in more than fifty intercontinental marketplaces (Pennell 2016, p. 73).

 Besides, Angostura’s satisfactory rums have acquired over 50 intercontinental rum honors for its flavor for the previous five years therefore making it one of the greatest enjoyed rum manufacturers in the realm (Ickes, et al. 2017, p. 1220). In line with the Angostura report of the year 2016, the company task is to bring the essence of Trinidad as well as Tobago to each client knowledge by providing desired goods as well as outstanding customer service.       

 Financial Summary for the period 2016 – 2017

2017

$`000

2016

$`000

Revenue

640,468

669,408

Cost of goods sold

(259,125)

(276,029)

Gross Profit

381,343

393,379

     selling and marketing expenses

(115,889)

(116,458)

     administrative expenses

(125,454)

(136,921)

Profit after operating activities

140,000

140,000

     finance costs

(2,192)

(2,850)

     finance income

622

156

Profit after continuing operations

138,430

137,306

    other income

2,888

3,047

    dividend income

330

1,508

    foreign exchange gains

13,812

860

    authorised entitlement expense

(13,894)

-

    fair value gain on assets held-for-sale

-

2,745

Revenue before Tax

141,566

143958,

    duty expense

(59,558)

(51,211)

Net Profit

82,008

92,747

Source (Ickes, et al. 2017, p. 1220).

Further, for the year ended 2017, Angostura recorded profits of about $640m as opposed to $ 669m in 2016,a decrease of $ 29m (4.3%) (Jones 2014, p. 125).Angostura net profit of $82m in 2017 was $10.8m below the previous year. Moreover, the export rum as well as aromatic bitters segments experienced growth while the domestic rum sake was affected by the economic climate (Hunt 2012, p. 9). Further, Angostura annual report (2017) stated that the companies’ streamlined efforts are on-going. In addition, the company have been working in the direction of improving the performance of its run-off management plant to facilitate advanced manufacturing productivity as well as to support international alcohol sales demand (Beheshti 2010, p .458).

As a way of maintaining companies highest level place in the arcade in addition carry on its sustainability, Angostura has preserved a strong operational investment with healthy cash sense of balance, managing excess cash as well as diminutive term nest egg to secure steady revenues (Reza Asgari and Hajbani Lahrudi 2014, p .217).

Angostura applied the SWOT analysis technique in the company to identify strengthens opportunities as well as its threats (Mphasha 2015, p. 300).

Strengths

Angostura company have been able to distribute various spirits, rums gins, as well as sauces to the markets. Worldwide recognition of the bitter products.

High level of promotional events as well as giveaways. Customer loyalty. Massive Salesforce that accommodates thousands of customers. Capacity to produce varieties of bitter products. Continuous supply of the final product’s. Availability of financial aid.

Weaknesses

Only supplies global products and brands in that there are no local brands for sale.

Import tax which takes the prices of the products to rice.

High profile costs connected with premium brands.

Centralization in that the firm is not able to evenly offer its services.

High cost of importation of the raw materials.

Opportunities

Venture into the local manufacturing firm to offer local goods to customers.

Smaller distribution centres primarily for local states.

Endeavour into a wider selection of world recognized branded products (Topcu and Demi̇ 2012,p .391).

Facilitate further sales through new distribution channels such as online sales. Moreover, Angostura may increase its market penetration for bitters in both foods in addition to drinks industry worldwide.

Threats

The main threat that Angostura faces is the stiff competition forum, other companies such as the AS Brayden who are the major distributors of alcoholic beverages of whiskies such as the “Johnny walker”. The Brayden firm is sustained by a state of the skill warehousing in addition to dissemination centre.

The Current implementations on alcohol prices and taxes. High levels of imported goods into the country in addition to changes in tastes and preferences of consumers with increasing trends.

However, the SWOT analysis framework has facilitated the company in recognising as well as examining the internal and external influences that can have an influence on the sustainability of the outputs (products) (Sztumski 2017 ,p . 2819).

New product

The new product that the Angostura has been inventing is bitter. Bitter are taste expositions contained in small bottles in addition they are classic and mostly used in cocktails (Avau and Depoortere 2015, p .415). In fact, most bitters are passionately sweet-smelling garland which bursts in waves up ones enjoyment (Sanders 2013, p .14). Moreover, Bitter manufacturing firm was officially opened by the Gordon Siegert family at the house of Angostura. Bitters bottling plant link was built solely for bitters produces located nearby to the firm’s bulk bitters producing facility so that bitters juices would be channelled in a straight line across and get packed (Anyasor, et al. x.2017, p. 25). However, bitter came in different tastes such as the Aromatic, orange, citrus and floral bitters. Additionally, bitter products are believed to have numerous uses such as reducing blood sugar levels as well as lower HbA1c for individuals with type 2 diabetes (Anyasor, et al. x.2017, p. 25)

According to Dr Anjou bitter juice lowers bad cholesterol levels in the body.in this manner, it significantly reduces the risk of heart attack in addition to stroke. Additionally, according to dr Saini, bitter products can be used to treat dandruff .Bitter juice reduces acne and aids in treating eczema as well as protects the skin from the harmful ultra violet rays (Mariod, et al. 2017, p. 102). Further, bitter gourd strengthens immunity as well as it prevents allergies and indigestion. Also, obese individuals consume the bitter juice to reduce their body weight (Mariod, et al. 2017, p. 102). Further, Bitters bottles are covered with oversized labels. On the other hand, the labels make bitter bottles to be unique and indeed give an interesting feature of the brand (Mariod, et al. 2017, p. 102).

Due to the numerous advantages the bitter products have, most individuals of all races and ages are consuming the products.

 Consumer Enquiry intended for Angostura

Segment

Details

Geographical

Angostura bitters are extremely consumed in many parts of the world. Most countries such as the United states, Australia and the United kingdom offer the largest markets for the products. Angostura company has ensured that the products reach 164 markets globally and that the customers get satisfied.

Demographic

According to Voisy, expectant females enjoy a sprint of bitters in energiser water. Angostura should ensure that these women never lack the product by constantly supplying to them. Further, in some countries, butters are used in by women in cooking. However, the majority of the people who use the products are drunkards who use it as a cocktail in their drinks. Most of these individuals according to parsons. Therefore, the youths are the most targeted individuals for bitter products.

Physiographic

Angostura’s firm has used numerous strategies in ensuring that bitter juices and other bitter products are in abundance in the market. Constant promotions have been made all over the world to sensitize individuals of its existence and make them buy.

Behavioural

During youth functioned the firm should educate the individuals on the importance of the product and establish their loyalty to the product through give away (Sztumski 2017, p. 2819).

Source ((Sztumski 2017, p. 2819).

Marketing objectives

The goal of Angostura Limited is to be the most lucrative rum firm in the Caribbean as well as unceasingly advance their position as the major sweet-smelling bitters firm in the realm (Sanders 2013, p. 14).

Long term

To bring the spirit of Trinidad as well as Tobago to each client involvement by providing ideal goods plus admirable merchandises as well as exceptional consumer service (Ekici 2014, p. 1223).

Segmentation

Angostura aromatic bitters are defined in consumer and business markets. The firm is the one responsible for serving the middle, upper, as well as the upper middle classes of the populace who are above 18 years

Market development

Diversification

New

Market penetration

Product development

Existing

Products and services

                                     Existing                                                                      new

Source (Sztumski 2017, p. 19).

Business focuses on the needs of the current consumers in the product development stage. The region symbolizes wider consumer market where companies pursue to comprehend their underlying needs as well as wants enhanced so that they can see prospects for new produces. The aim of the business here is to replace existing products with new things as well as to provide complementary products that consumers need to buy before the main product such as the bitter juice. Moreover the angostura firm sold other products the customer wanted to buy as a way of strengthening the relationship (Diaz-Osborn and Osborn 2016, p. 52).

Marketing Mix of Angostura Holdings Limited

Elements

Details

Product

Angostura’s came up with unique bitter products that other firms could not be able to produce and supply to the market.

Price

The local arcade is subtle because of struggle. The approaches are to contrivance dissemination valuing for certain products in order to create swift approval and to accomplish higher capacities of sales.

Subject to varied effects through climate change and government regulations.

Place

The leading dissemination centre is located in Laventille, Trinidad in addition to Tobago. The deliveries of merchandises to consumers are done via direct as well as ancillary dissemination networks. Conversely, the distribution channels facilitates ease of accessibility of goods all over.

Promotion

Angostura applied viral marketing strategies such as the interest to show the products they were dealing with.an individual can create YouTube videos, make cross marketing between hotels and restaurants to sensitize the people on how they can get and use the Angostura aromatic bitters and juices (Seehaus 2016, p . 17).

People

It is important to have the correct individuals for proper business sustenance and development. Tremendous consumer service workforces when employed with training upsurges the worth of all the produces.

Process

Electronic Points of Sale (EPOS), Internet publicizing and eminence of generating merchandise can easily trigger sales and make the firm to make enormous profits. Electronic point of sale speeds up work and also helps in keeping the records of the firm transactions.

Physical Evidence

Angostura Limited is located on a 20 acre complex. The strategically positioned firm slows it necessary to easily distribute the goods to customers as well as obtain the raw materials.

3*3 Matrix

Year

Sales

Cost of sales

Profits

2020

$682

$42

$71

2019

$669

$51

$82

2018

$640

$59.5

$92

Source (Author 2018)

Budget

Year

Assets

Cost

Total

2015

5 Trucks

@ $90,000

$450,000

2016

3 Pulp machines

@ $120,000

$360,000

2017

6 warehouses

@ $240,000

$1,440,000

$ 811,440

Source (Author 2018)

Time schedule

2nd Half 2020

year/activities

July

August

Sep

Oct

Nov

Dec

1 pulp Machine

Purchase of 1 Truck

building 1 warehouse

production

Auditing

Evaluation

Monitoring and controlling mechanism.

Involves tracking, going through, and regulating task headway whether the firm is making further progress or dragging (Ebrahim, Battilana, and Mair 2014, p. 67).

Comprises eminence fourth estate, advancement dimension, as well as anticipating of the future profit making (Botvinick, and Braver 2015, p. 54).

Reports on scope, schedule, cost and possessions.

Controls project in addition to task document variations (Riera-Prunera 2014, p. 4499).

Device of opportunity, program, expenses, as well as possibilities

Reinforces recognition of the inputs of the raw materials and other inputs being brought by the suppliers to the factory (Bek,  Gaiser, Qin,  and Utley 2015, p. 56).

Train workers on Total Quality management tenchiniques that allows completion of excellent work.

Implements risk control plans and actions

Implement annual process audit and evaluation process in the system (Pen, et al. 2013, p.98).

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