Bestway (Holdings) Limited Annual Report & Accounts 2014 Bestway (Holdings) Limited Was Founded in 1963 by Sir Anwar Pervez
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Bestway (Holdings) Limited Annual Report & Accounts 2014 Bestway (Holdings) Limited was founded in 1963 by Sir Anwar Pervez. It is the UK’s 18th largest privately-owned company and 7th largest family-owned business. The Group consists of: Bestway Wholesale, the largest independent wholesaler in the UK; Bestway Cement, the 2nd largest cement manufacturer in Pakistan; United Bank Limited, the 2nd largest private bank in Pakistan. We continue to grow from strength to strength in all these areas. Welcome to the Bestway (Holdings) Limited 2013/14 Annual Report. Executive 02 Review 02 Chairman’s statement 06 Group Chief Executive’s Review Reports ’14 18 18 Directors’ Report 20 Statement of directors’ responsibilities in respect of the Strategic Report, Directors’ Report and the financial statements 21 Independent Auditor’s Report to the members of Bestway (Holdings) Limited Consolidated 24 accounts 24 Consolidated profit and loss account 25 Consolidated balance sheet 27 Company balance sheet 28 Consolidated cash flow statement 29 Consolidated statement of total recognised gains and losses 30 Notes Company information 96 96 Depot Information 100 Company information Bestway (Holdings) Ltd Chairman’s 02 Annual Report Statement & Accounts 2014 Chairman’s Statement On behalf of the Board of Directors, I am pleased to place before you the consolidated financial statements of Bestway (Holdings) Limited and its subsidiaries (‘the Group’) for the year ended 30 June 2014. ‘ Profit before tax Business overview totalled £250.3 million in 2014 compared Ten years ago under our new Chief to £164.3 million in 2013. including the Banking Executive, the Group set out a new Group totalled direction. The emphasis was not only to In April 2014 Bestway acquired Glasgow maintain the Group’s position as a major based wholesaler, Sher Brothers (Cash £250.3 million in 2014 player in the sectors that it operates & Carries) Limited, and merged it into compared to £164.3 in, but also to increase market share in the Batleys brand. This latest investment these sectors. underlines our commitment to the million in 2013.’ Scottish wholesale sector. The progress since has been significant; we have not only consolidated our As part of the Group’s diversification leadership positions, the management strategy, in July 2014 the Group acquired team led by the Chief Executive has The Co-operative’s Pharmacy business doubled the group turnover and for £620 million. The Co-operative profitability. Significant investments have Pharmacy is the UK’s third largest been made in long-term growth drivers independent pharmacy business and the including infrastructure and human largest in Wales. capital development. During the period under review Bestway Performance Cement Limited (‘BCL’) operations The wholesale sector remains under have experienced growth with turnover pressure, with the growth of the decreasing by 1.9% to £174.5 million. multiples, discounters and increasingly BCL contributed £59.3 million towards competitive pricing posing significant Group operating profit an impressive challenges. We continue to meet these increase of 34.06% on the prior year. challenges by offering our customers an attractive combination of quality, value In July 2014 BCL entered into a binding and service, and this, underpinned by agreement to acquire Lafarge’s 75.86% our values, will ensure that Bestway stake in Lafarge Pakistan Cement Limited continues to be the wholesaler of choice for an enterprise value of £193 million (US to the independent retailers. $329 million). Lafarge Pakistan Cement Limited operates an integrated cement Group turnover, for the year ended 30 plant in the north of Pakistan, close to June 2014 totalled £1.98 billion compared Islamabad. With this acquisition Bestway to £1.96 billion in the previous year. Profit Cement Limited has become Pakistan’s before tax increased to £129.8 million largest cement manufacturer. compared to £84.8 million in the previous year (both figures exclude the Banking During the period under review our Group subsidiary, United Bank Limited banking subsidiary UBL experienced a (‘UBL’)). From 1 January 2014, United period of robust growth with the asset Bank Limited became a subsidiary base increasing by 16.16% to US $10.29 undertaking and has been consolidated billion and deposits growing by 13.03% as the Banking Group in this set of to US$ 9.90 billion for the year ending consolidated financial statements. Profit December 2013. before tax including the Banking Group 03 ‘ We have not only consolidated our leadership positions, the management team led by the Chief Executive has doubled the group turnover and profitability.’ In June 2013 UBL established its first dedicated African subsidiary in Tanzania. Tanzania is one of the most under served markets in East Africa with only 12% of the country’s population having access to a bank account. The subsidiary was officially opened by the Vice-President of Tanzania Dr Mohamed Gharib Bilal in September 2013. Bestway (Holdings) Ltd Chairman’s 04 Annual Report Statement & Accounts 2014 Chairman’s Statement In June 2013 UBL established its first In February 2014 Bestway was awarded Outlook dedicated African subsidiary in Tanzania. the Investors in People Bronze award for In 2015, our focus will be on continuing to Tanzania is one of the most underserved demonstrating a degree of excellence in drive margin improvement in our establis- markets in East Africa with only 12% of the way they develop and support their hed businesses, together with delivering the country’s population having access staff. The Bronze award is achieved by value from our recent acquisitions and to a bank account. The subsidiary was just 5% of Investors in People recognised achieving the synergies between them officially opened by the Vice-President organisations in the UK. The Investors in and other parts of the Group. of Tanzania Dr Mohamed Gharib Bilal in People Standard is awarded to well- September 2013. run organisations, which demonstrate Overall, reflecting on a successful good management practice with a year, let me express my thanks and For the second consecutive year in high emphasis on best practice people appreciation to our supplier partners; November 2013, UK’s Banker Magazine management and development. our loyal customers; my fellow directors; declared UBL ‘The Bank of the Year in our Chief Executive Officer; Senior Pakistan 2013’. In May 2014 BCL was ranked 10th out Management and to all the other 33,600 of 478 Publically Listed Companies employees around the world. Looking By 31 December 2013, the Group had by volume of donations in Pakistan ahead, I am confident that we have increased its shareholding in UBL to according to Pakistan Centre for the strategy, people and resources to 59.25% by acquiring an additional 8.30% Philanthropy’s (PCP) Philanthropy Survey continue to deliver sustainable growth in of the shares of UBL from the Abu Dhabi 2012. the years ahead. Group. With this investment of over $120 million, Bestway Group acquired the last In June 2014 Bestway Group organised part of the remaining shareholding that its 20th annual charity event at Royal Sir MA Pervez, OBE HPk its former joint venture partner (the Abu Ascot. The chosen charity this year Chairman Dhabi Group) held in UBL. was Action for Children. This national 17 February 2015 charity works directly with over 300,000 In March 2014 UBL Omni was launched children, young people, parents and in the United Kingdom to facilitate carers. It provides 650 services across remittances from the UK to the South the country. It tackles issues such a child Asian subcontinent. neglect and abuse. Social responsibility In the UK, Bestway Group donated I firmly believe that our commitment £535,000 to the Bestway Foundation to good financial performance needs in the UK. The Bestway Foundation to be matched by a continued focus continues to provide vital support to on corporate social responsibility, by University students; local; national and working with integrity and delivering international charities. sustainable business development. 05 ‘ In the UK, Bestway Group donated £535,000 to the Bestway Foundation in the UK. The Bestway Foundation continues to provide vital support to University students; local; national and international charities.’ £1.98bn £250.3m 59.25% Profit New total 2014 before shareholding Turnover tax in UBL Bestway (Holdings) Ltd Group Chief 06 Annual Report Executive’s & Accounts 2014 Review £1.98 billion turnover ZM Choudrey Chief Executive 07 Group Chief Executive’s Review On behalf of the Board of Directors, I am pleased to present the audited financial statements for Bestway (Holdings) Limited for the year ended 30 June 2014. Review of business The Group’s share of operating profit Key highlights Despite a challenging business from UBL during the year under review Overall, the Group’s turnover for the environment both in the UK and globally increased from £84.9 million in 2013 to year ended 30 June 2014 increased during the year under review, all the £103.3 million. This increase of 21.7% by 0.9% to £1.98 billion from £1.96 Group businesses continued to enhance on an equity accounting basis is mainly billion in 2013. their respective market share. due to the fact that UBL has been consolidated for the first time in the All our businesses were profitable Group financial performance Group accounts. for the year under review, and During the year under review, turnover the overall Group profit before for the wholesale business increased by Tangible fixed assets after depreciation tax increased by 51.5% to £250.3 1.2% to £1.80 billion, while turnover for as at 30 June 2014 stood at £624.0 million as compared to £164.3 the cement business in Pakistan saw million, compared to £458.7 million in the million in 2013. a decrease of 1.9% to £174.5 million.