The Massy Group has reconfigured and is now concentrating on three portfolios namely:
1. Integrated retail
2. Gas products
3. Motor services (car dealerships and heavy equipment)
One of the most dynamic conglomerates in the region, Massy under the leadership of its CEO Gervase Warner is actively looking to make its presence felt with a culture that is intrinsically Caribbean and caring.
Massy Holdings ended last year on a positive note, posting revenues of TT$3.40 billion for the December quarter, a 5 per cent increase on the TT$3.23 billion reported for the same period in 2021. Net profit came in at TT$219.99 million with Earnings Per Share (EPS) for the quarter under review of TT$0.098 and book value per share of TT$3.55. Massy’s assets for the period come in at TT$13.13 billion.
Last December saw the group move on three significant acquisitions, namely: Rowe’s IGA supermarkets in Jacksonville, Florida (US$47 million), Air Liquide (US$57 million) and IGL Jamaica (US$140 million)
Our Today sat down with Warner for an in-depth interview while he and some members of his team were in Jamaica.
He explained the rationale behind the spate of recent acquisitions and what Massy’s strategy is going forward.
“Size matters, scale does matter. The idea is to put together these assets that allows us to go into the back office and take costs out. This allows us volume where purchasing power can be used as leverage to buy product at a lower cost, make profit that can be shared with employees and the societies within which one operates. This has been very much the case with us as far as industrial and cooking gas is concerned.
“Now whereas the car business may be looking at a dealership in Spain, the UK or even Ecuador, the gas business is about consolidation in this basin. When you think about it, whether it is Trinidad or Texas, the purchase of LPG as a commodity, being able to pool the volumes you are purchasing from either of these important territories is important for the price that you get. For sure, that’s a very important part of the strategy for gas in the region.”
Taking the decision to focus on the three portfolios and divest non-core assets allowed Massy to invest capital that was trapped and not being utilised in the business. That gave it about US$175 million in cash plus another $100 million equivalent in local currency in Trinidad. The US dollar cash allowed the group to make those significant acquisitions last year.
Warner elucidated, “It was vital that we were able to unlock capital from within the Group. Listing in Jamaica opens us to a more international shareholder base because Trinidad has had some challenges with its foreign exchange regime, and it is now not as friendly an environment for international investors. We have an opportunity in Jamaica to use capital markets to tap into new capital to fund some of the growth we will have in the years to come.
“We still have some of the reserve from the sale of the domestic properties. We still have borrowing capacity on our balance sheet so it’s not an urgent thing. We are talking to institutional investors to get a feel of what is possible, what could be recommended so that in about 18 to 24 months when we are ready, we will be in a position to tap the market here in Jamaica.”
The Massy boss is looking to position Massy from a Caribbean to a global brand. He notes that Massy always had scale, but it was diffused across multiple businesses. Now it is focused on just three portfolios.
“We do have global ambitions. We used to be confined to the Caribbean Basin but we are now called on to expand across the globe. Over the last one hundred years we have been able to celebrate who we are across the Caribbean. The rebranding of Massy reflects the tapestry of life in the Caribbean, the way we live, work; the warmth of our people.
Celebrating 100 years in business
This year, the esteemed Caribbean conglomerate celebrates its centenary, a major milestone in its history.
So what can Gervase Warner point to after 100 years in business?
“After 100 years, Massy has been able to break away from colonial constraints to uncork the essence of our “Caribbeaness” and have that as an expression of who we are as we get out into the world.
“Some things about Massy have not changed. When Harry Neal and Charles Massy came together, they were both high-integrity businesspeople and that remains a core value to this day. They also had this obsession, particularly Charles Massy for customer service. This remains in our lifeblood today. They placed tremendous stock in training and developing their employees, but they had a colonial mindset which has shifted now with the idea of investing in employees remaining. Both men were innovators.
“Charles Massy did a number of modifications to machines in Trinidad to harvest cane which was adopted around the world. This approach has continued with us.
“In 1923, which was before The Depression, before the Second World War, before Independence- through it all, Neal &Massy went through epochs, evolving and growing. One of the things that brought Harry Neal and Charles Massy together was the struggle of the Great Depression. There was a frugality and conservativeness which quite frankly is part of the DNA of the Group. We are still not, I would say, a wildly adventurous risk-taking group but the frugality was to a point where we would not re-invest, the assets became run down, people were not necessarily given the opportunity to generate wealth from within the organisation,” said Warner.
The way he sees it, the biggest thing Massy has done over the years is to attack the command and control of the company from top to bottom. He believes in that regard; a corner has been turned and Massy is now a servant-led organisation that has expectations of its leaders. Those leaders are assessed against the ability to bring out the best in people. This could only have been achieved after the passing of time.
Neal & Massy stayed in the automotive space for many years. Then it started making acquisitions becoming a conglomerate with a footprint across the islands. However, it didn’t have any focus, it would snap up all kinds of businesses across the Caribbean. Now it is more disciplined as to where it will put capital. This thinking took a long time. It has been a long journey.
Just as last year was a notable year for acquisitions, it will equally be remembered for major cyber attacks on Massy.
Hive Ransomware Group in April 2022, leaked online 87,550 folders and 704, 047 corporate files of Massy stores in Trinidad. This contained data on salaries, staff’s personal details, audit reports and other vital financial information. It was described as “The largest Caribbean data breach dump to date.”
This forced Massy to suspend electronic services. Compounding concerns was the attack on Massy Distribution Jamaica’s operations in October, later that year, with 17 gigabytes of data leaked on the internet. This revealed staff details and financial records.
Cyber security is now an essential line in operating expenditure and the attack on Massy should be paid attention to by all major companies in the Caribbean because it could be any one next.
How does Massy intend to address this new threat and will it put up a bulwark against further attacks?
“It’s really unfortunate but it is a new risk. David Affonso who has been with the Group for 30 years, (executive chairman, integrated retail business unit) says the money we have been spending on physical security on our stores with guards and such to protect against theft is so much more than we have been spending on cyber security.
“Cyberattacks [are] the more serious threat than people stealing from our stores. We have begun to invest very heavily in protecting the group from such attacks with equipment, processes, new technologies, expertise to understand what we can and can’t do. We have had to update our internet systems. We have to better guard against taking these cyber hits, declared Warner.
Trinidadian business leaders
Gervase Warner is one of the most dynamic corporate leaders in the Caribbean and his reputation precedes him. He is a member of the pantheon of great Trinidadian business heads since Independence, up there with the likes of Arthur Lok-Jack, Peter July Lawrence Duprey, the Aboud family, Derek Chin, Andre Monteil.
So why does Trinidad produce such great business leaders. What’s the secret?
Here Warner was self-effacing and attempted to place focus on the wider Caribbean which is a credit to him. Most leaders like to expound on their attributes but not Warner, nevertheless this writer insisted.
“Trinidad is a bastion of entrepreneurship. Having been blessed with oil and gas for many years it became a progressive economy which provided opportunities including sophisticated transactions with international players. This gave exposure to business principles and strategies. Great businesses have been built in Trinidad. We have to count our blessings. We now must harness this quality for the next evolution of our economy,” he said, with a wide smile.
The team at Massy don’t simply follow Gervase Warner – they have faith in him and the qualities he possesses. One gets to a certain age and it’s not about following a leader but more about why you accede to that head of the organisation. You ask yourself the question, why should I?
Gervase Warner is the head of one of the biggest conglomerates in the Caribbean so how best would he describe his management style and what does he want for the organisation?
The answer tells you a lot about Warner.
“Can I ask our corporate secretary and senior vice president for corporate governance, Wendy Kerry, to answer that?”
I chuckle. He just did. Wendy Kerry has a laugh, she gets it.
She responds, “It’s about encouraging people to be the best they can be. I must say it has been a phenomenal shift for the organisation over the last ten years. It has been a long journey. We now have empowered people who are creative with plenty of ideas. As a leader it can make you a little uncertain in that you think, they know what they are doing, hey, what do I do?
“Being conscious in business does work. It’s about your employees, your communities, how you live your daily life, how you treat with people. You must have leadership with compassion, vulnerability, authenticity and be consistent with that.
“When I first joined Massy, Gervase said to me, it’s not just about making money, it’s something bigger than that. I thought to myself at the time, if it’s not about money, what is it about? You can’t tell your Board you aren’t about making revenues and profit. We have been on this journey with Gervase. He is a leader that does not have followers but rather a leader who has created other leaders around him. He encourages disagreements. It’s not always easy. He lives one of Massy’s values-love and care. Gervase is a true friend, not just a boss. He leads by example.”