Local Financial Conglomerate Reports Reduced Net Profit Due to Government’s Tax Changes

Changes to government’s corporate tax structure have hit the bottom line of a local financial services conglomerate.

Cave Shepherd & Co Limited, a publicly listed company on the Barbados Stock Exchange (BSE) reported reduced net profit for the half-year period ending June 30 and has identified the increased tax rate of nine per cent as a key factor.

In unaudited consolidated financial highlights published by the Cave Shepherd Group, it revealed total revenue of $17.46 million, an increase on the $16.32 million recorded for the corresponding period in 2023. However, the group’s net profit for the period was $7.63 million this year, down from the $8.06 million reached at June 30, 2023.

In their commentary that accompanied the financials, chairman Sir Geoffrey Cave and chief executive officer Roger Cave stated: “The Group’s financial services businesses, Cave Shepherd Card (Barbados) Inc. (Payce Digital), Fortress Fund Managers, SigniaGlobe Financial Group and DGM Financial Group all performed very well at an operational level but were all negatively impacted by the increase in the corporation tax rate to nine per cent which became effective for the 2024 financial year.”

Cave Shepherd has moved away from its original mainstay in retail trade to financial services. The company’s top officials said its retail associate company GCS Limited (Ganzee), demonstrated “encouraging revenue growth and improved results” over the half-year period, however, it was faced with higher expenses related to the acquisition of five new stores in Saint Lucia, which are now expected to commence operations in the latter part of this year.

A fairly new subsidiary operation within Cave Shepherd & Co is its Pick UP Taxi Inc. app, a local version of the globally popular Uber ride-hailing and courier services company.

According to Sir Geoffrey and Roger Cave, the technology-driven service company “continues to show significant growth in both the number of rides and improved profitability compared to the prior year”.

As part of the Cave Shepherd group’s corporate social responsibility efforts, it donated EC$100 000 through its subsidiary Ganzee towards relief and rebuilding initiatives in Grenada, following the passage of Hurricane Beryl on July 1. The group also outlined its commitment to assisting Barbados and members of the Organisation of Eastern Caribbean States during these challenging times.

Meanwhile, the Group’s net assets have increased by 11.6 per cent to $105.0 million at the end of the review period, as the group chairman and CEO explained it was their aim to continue to “maintain very strong liquidity levels with cash and cash equivalents at $45.6 million”.

At the same time, the top company officials disclosed in their statement that Cave Shepherd & Co would continue to actively seek new investment opportunities to bolster its growth and diversification both locally and regionally.

In addition, the board of directors have maintained the interim dividend at $0.18 per share this year, which is expected to be paid this month.

“We remain optimistic that our businesses within the group will continue to record favourable results for the remainder of the year, although somewhat below the prior year,” they noted.

(IMC1)