Questions for Roberts

by GEORGE CONNOLLY

THE NATION did its part on the Roberts Manufacturing public share offer (PSO). Michael Jordan of JMMB offered a fair retail primer.

Jeremy Stephen calculated an intrinsic share value of roughly half the offer price and challenged investors to read the prospectus rather than the marketing. But there is a category of unanswered questions before the May 7 closing date. I have read 204-page prospectus. Here is what I could not find.

How much did Proven pay?

In 2021, Proven Group of Jamaica acquired a 50.5 per cent controlling stake in Roberts Manufacturing from Massy Holdings. The prospectus does not tell you the price Proven paid.

That omission is extraordinary. The entire investment case rests on the proposition that US$0.50 per share – implying a total company value of US$62.5 million – is fair today.

To assess whether that is true, you need to know what a sophisticated, informed buyer with full access to the company’s books thought it was worth four years ago.

Based on publicly available information, a reasonable estimate places Proven’s acquisition cost between US$8 million and US$15 million for their stake, implying a total company value at the time of perhaps US$16 million to US$30 million. At the PSO price, that same stake is worth approximately US$31.6 million – before dividends received, and before the US$1.8 million annual management fee paid by Roberts to its shareholders throughout the holding period.

That is not an accusation. Private equity works by buying assets, improving them, and selling at a higher price. But the Barbadian public deserves to see the 2021 entry price, and to form its own view of who is capturing value in this transaction, and who is providing it.

Which competitor built a feed factory?

The prospectus references, with careful vagueness, the loss of “a major animal feed customer” as the primary explanation for a 23 per cent revenue decline in the most recent trading quarter. Management describes this as “transitory”. The prospectus states that “full recovery of previous feed volumes is not the immediate goal”.

The customer that left built their own feed mill. Super Feeds – a purpose-built poultry facility representing a reported BDS$44 million capital investment – began operations in 2024, constructed specifically in response to price increases by Roberts’ feed subsidiary, Pinnacle Feeds.

Super Feeds’ entire proposition is built on being the cheaper alternative to Pinnacle. They are not going away.

Pinnacle Feeds contributes approximately 49 per cent of Roberts’ consolidated revenue. The prospectus projects EBITDA nearly doubling to US$10 million by 2028 – a recovery that depends overwhelmingly on the feed segment, now facing a well-capitalised, permanently motivated competitor in a small island market.

Has management modelled what happens to Roberts’ earnings if Super Feeds captures 30 or 40 per cent of the local poultry feed market? Investors should see that model.

If it does not exist, that is itself a significant finding.

What about the oil price shock?

Roberts’ prospectus was prepared against an economic backdrop that has changed materially. The United States-Iran conflict that escalated in early 2026 sent Brent crude from approximately US$70 per barrel to above US$115 by early April.

Freight rates across the Atlantic have risen sharply.

Roberts imports corn and soybean meal from the Americas, meaning higher freight costs hit input prices immediately; its production operations are energy-intensive; and squeezed household budgets across Barbados and the wider Caribbean could dampen demand for its edible food products.

Has management revised its financial year 2026 cost and earnings projections to reflect current energy and freight prices? Investors have the right to that information before they commit.

Why four years to transfer a pension?

Roberts Manufacturing ceased participation in the BS&T Pension Scheme in June 2021. A transfer value of US$2.64 million was agreed. As of the most recent accounts – March 2025 – that transfer has not been completed. Four years have passed, and the agreed amount remains unrecognised in Roberts’ books.

A four-year delay suggests either a dispute over the transfer value, an actuarial disagreement about the underlying liability, or a legal complication that has not been disclosed.

If the assets ultimately transferred are insufficient to meet the scheme’s obligations, any residual liability falls on the company – and therefore on the Barbadian investors who bought into this offer.

What caused the delay? What is the maximum potential shortfall?

Who indemnifies Roberts against any excess liability?

Who holds the 40 per cent?

ADM, one of the world’s largest agricultural commodity companies, holds a 40 per cent stake in Pinnacle Feeds. ADM also controls the supply of the raw materials Pinnacle processes.

If the relationship with ADM were to deteriorate, or if performance covenants were triggered by declining revenues – as they are declining – the impact on Roberts would extend well beyond the ownership structure. These are standard joint venture provisions. Investors need to understand whether they are present before assessing what Roberts is actually worth.

The widely cited 6.8 per cent dividends yield is genuine. The dividend is a policy set annually by a board whose composition, the prospectus is explicit, will be determined by Proven and ANSA McAL in the near term. The same parties selling shares today will decide tomorrow whether those dividends are paid.

Stephen’s figure of approximately US$0.27 per share valuation has not been publicly challenged or rebutted since publication. The prospectus offers no comparable company analysis, no discounted cash flow, and no independent fairness opinion.

Export revenues – the primary projected growth mechanism – fell from 27 per cent of total revenue in financial year 2024 to 18 per cent in financial year 2025.

Roberts’ edible foods business is a genuinely strong asset with real barriers to entry. It almost certainly deserves to be publicly listed and broadly owned. The question is whether the total company, at this price, at this moment, with these unresolved risks, represents fair value for the Barbadian investor. Roberts’ management team is capable of answering these questions. Ask them.

The views expressed are the author’s own and do not constitute investment advice.

George Connolly is an entrepreneur and businessman.

GEORGE CONNOLLY (FP)