November 27, 2020
Management of Carreras Limited highlighted that the 2020 financial year reported a 9.4% increase in operating revenue to end at $14.13 billion relative to the $12.91 billion reported in 2019. This corresponded to a 5% increase in net profit which totalled $3.58 billion, up from a 2.2% reduction in profitability in the previous corresponding period. Managing Director, Mr Raqoul Glynn, highlighted that, “the performance continued to be driven by volume growth which commenced in 2017.” He also emphasized that, “the Company paid dividend four times during the financial year ended March 2020, totalling $3.11 billion and is committed to ensuring shareholder’s value.” He mentioned that, “challenges within the financial year included the impact of the illicit cigarette trade, which resulted in the Government standing a loss of over $2.5 billion.”
During the 2020 financial year, volumes were positively impacted based on the Company’s route to market improvements. The key brands that have shown strong performance were:
- The Craven A brand, which was the leading brand for the 2020 financial year, remains resilient despite supply chain issues brought on by Covid-19.
- The Matterhorn brand which is being modernized to ensure the product evolves to provide consumers with more.
- The lower end brand Pall Mall continues to perform well to compete with and counteract the sale of illicit cigarettes on the market.
Due to the impact of Covid-19, the Company experienced a 7% reduction in operating revenue which totalled $6.15 billion for the six months ended September 2020, relative to the $6.64 billion reported in the corresponding period in 2019. Net profit for the six months ended September 2020 saw a 6% reduction in profitability after tax, to end at $1.56 billion when compared to the $1.75 billion reported in 2019. Mr. Raqoul Glynn remains optimistic and shared that the performance for the six months ended September 2020 was a good base for the Company to build upon in the coming quarters. Despite the challenges, Carreras is committed to ensuring that the dividend remains flat, coinciding with its mission to provide sustainable delivery of profitability and value to shareholders.
Carrera’s Commitment (Outlook):
- Sustaining industry leadership
- Strong financial performance
- Transforming the portfolio
- Expanding the distribution footprint
- Delivering value to shareholders and stakeholders
According to the Company, other plans include:
- Continuous enhancement of its culture of giving back; in the 2020 financial year the Company distributed fifty-three (53) scholarships amounting $11 million. Management, however, noted that this form of contribution may be in jeopardy due to the negative impact of Covid-19.
- Adding value towards nation building by increasing staff compliment which has grown by 25% over the last four financial years.
- Taking the Company to the next level, which includes the changing of the Company’s 85-year-old logo, to be accompanied by the Company’s slogan “A better tomorrow”.
- As it relates to Research and Development, the Company noted that the research facilities in Richmond Virginia and Southampton are focused on ways to improve the overall performance of tobacco, production process, safety, and consumer satisfaction.
- Carreras Ltd as a member of the British American Tobacco group, has a proposed plan to bring forth potentially reduced risk products such as E cigarettes to the Jamaican market in different formats.
In response to a shareholder’s question regarding Carreras no longer being a large subsidiary in Jamaica, Mr. Raqoul Glynn shared that, “this decision was made based on the realization that the Company’s involvement in several areas reduced its overall performance. Hence, the decision was made to focus on the Company’s core business of being a marketing and distribution company for tobacco brands. It was also cost effective to manufacture offshore to increase economies of scale which in turn increased shareholder’s value.”
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