Productive Business Solutions merging with Trinidad's Massy TechnologiesWednesday, June 23, 2021
BY DURRANT PATE
Documents and information technology (IT) company Productive Business Solutions (PBS) is merging with Massy Technologies (Trinidad and Tobago), which is also in the IT business.
The planned merger is subject to the required approvals from stakeholders and when executed will be increasing PBS's addressable market, diversifying its product mix and expanding the geographical reach. The amalgamation will see synergies in administration costs with implementation of the PBS ERP system and the combination of offices and warehousing in Barbados and Jamaica.
The merger has been made possible by PBS parent company, the Musson Group, which earlier this year acquired Massy Technologies from the Massy Group. Massy Technologies has operations at its base in Trinidad and Tobago, which is said to be the largest IT market in the Caribbean and Guyana, which is the fastest-growing economy in the region.
Of note is the fact that PBS doesn't have a presence in these two markets. PBS Chairman P B Scott, who made the disclosure in a letter to shareholders, stated that with the merger the company will welcome over 500 IT professionals to the family.
PBS has a staff complement of 1,600 professionals drawn from operations in 16 countries.
“We truly believe that in this case the ultimate combination will strengthen both companies' capabilities and will be a simple case of two plus two equalling six,” Scott advised shareholders.
He reiterated that PBS focus of continuing to be people and customer lead investing even further to continue the development and growth of the business. In his forward to the company's 2020 annual report, Scott reported that 2020 was a challenging year during which the company had to adapt and do so quickly, but even so profits after tax declined as print volumes fell.
However, structural changes, in addition, to cost reduction implemented in 2019 were made quickly, which allowed its earnings before interest, taxes, depreciation, and amortisation (EBITA) to remain flat, thus maintaining cash flow in 2020 over 2019. EBITA is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances.
With PBS managing to keep its EBITA flat in the pandemic year, the company's chairman remarked that,” this was a remarkable achievement and points to the resilience of the business model.”
He explained that while the company faced several national lockdowns in several countries, closure of clients' offices as well as supply chain disruption on a scale not seen before, it also faced new opportunities. These include a significant demand for IT products for the education channels and for businesses pivoting to work from home.
Scott declared that many of these opportunities will be exploited in 2021. For his part, Pedro París, PBS chief executive officer, advised that the most impacted line of business was the printing division, which affected the company's revenue by 10.1 per cent. As a result, the gross profit decreased 10.99 per cent and the expenses excluding depreciation and amortisation were reduced 13.8 per cent lower than the previous year.
This allowed the company to close 2020 with an achievement of 82 per cent of the planned EBITDA. These results, he said, were above what the industry achieved in 2020. París emphasised that, “on a high note, the last quarter of the year was the second-best ever thanks to the contribution of the IT and Services business lines.”
Looking forward, he stated that “PBS is working together with XEROX to grow the print volumes composed by supplies, paper, maintenance, click charge, lease, and rental charges, which were heavily hit by closed offices, public buildings, schools, and entire economic sectors where it is located.”
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