September 01, 2020
In United States dollars (except where it is indicated otherwise)
Caribbean Producers Jamaica Limited (CPJ) for the year ended June 30, 2020 reported a 16% decline year on year in gross operating revenues to close at $91.70 million compared to the $109.62 million for the prior year. For the fourth quarter the company posted a 79% decrease in revenues to close at $5.78 million relative to $27.88 million for the same quarter of 2019. Additionally, Management highlighted that the Company “CPJ Group, being the largest supplier of food and beverage to the Hospitality sector, was severely impacted by the global pandemic. Group sales plummeted from the month of March 2020 and continued to be adversely affected until the end of the fiscal year June 2020, impacting Q3 and Q4 sales and profitability, typically the Group’s most profitable trading period.” Moreover, “ the loss in the revenue for this perios was observed both in onshore and offshore operations,” as per Management.
Cost of operating revenue showed a 15% decrease closing the period at $70.93 million relative to $83.40 million for the previous year. For the quarter the company recorded a 71% decrease in cost of operating revenue to close at $6.53 million relative to $22.56 million for the comparable period in 2019. Consequently, CPJ recorded a 21% decline in gross profit to $20.77 million (2019: $26.22 million). The quarter incurred a gross loss of $ $742,770 relative to a gross profit of $5.32 million in 2019.
Selling and administrative expenses were $19.27 million, a 16% decrease from the $22.86 million posted last year. Depreciation for the year was $4.34 million when compared to the corresponding prior year of $2.47 million.
Other operating income totalled $128,448; this compares with other operating income of $175,059 booked a year ago.
Operating loss totalled $3.15 million relative to operating profit of $392,069 in 2019.
Finance income amounted to $3,724 (2019: $569), while Finance cost was $2.41 million (2019: $1.68 million). As such, loss before taxation was $5.55 million compared to a loss of $1.29 million in 2019.
Net loss for the financial year amounted to $4.35 million compared to a net loss of $1.17 million booked in 2019 following tax benefit of $1.20 million (2019 tax benefit: $117,354). On the other hand, net loss for the quarter amounted to $4.34 million relative to a net loss of $185,654 booked last year.
Net loss attributable to shareholders for the year amounted to $4.07 million, this compares with the net loss attributable to shareholders of $1.17 million booked twelve months earlier.
Total comprehensive loss for the year amounted to $4.35 million (2019 loss: $1.17 million).
As a result, loss per share (LPS) for the year amounted to US0.3698 cent compared to EPS US0.1063 cent in 2019. LPS for the quarter amounted to US0.39 cent relative to loss per share of US0.02 cent. The number of shares used in our calculations amounted to 1,100,000,000 units. CPJ’s stock price closed the trading period on August 31, 2020 at a price of $2.41.
CPJ’s also stated, “COVID-19 official travel bans, and restrictions continue to disrupt global economic activity on an otherwise booming travel and tourism sector. With the easing of the travel restrictions and bans beginning June 2020, CPJ Group has seen some increased demand for products and services in the first few months of the fiscal year 2021.”
CPJ further noted, “We are optimistic of a solution to the virus will be available soon and restore confidence in travel in the usual busy tourist season from December 2020 to March 2021 and beyond.”
Furthermore, Management noted that, “the Group has a series of new IT initiatives lined up for implementation in the new fiscal year, the desired outcome of which is to strengthen its technology platform for further growth and to achieve operational efficiencies. The slowdown in the sales activity due to the ongoing pandemic has assisted the company in a smooth implementation of the new IT initiatives as it reduced the risk of technological related errors towards the fulfilment of its customers’ obligations.”
Balance Sheet Highlights:
As at June 30, 2020, CPJ’s total assets amounted to $60.56 million, a 10% decline year over year from the $67.47 million as at June 30, 2019. The increase was due mainly to decline in ‘Inventories’ which fell 24% to $24.11 million versus $31.87 million reported in 2019. ‘Accounts receivable’ also contributed to the downward movement in the asset base with a 47% decrease to $8.39 million from $15.89 million in 2019.
Shareholder’s Equity as at June 30, 2020 totalled at $17.91 million (2019: $21.97 million) resulting in a book value per share of approximately US1.628 cents (2019: US1.998 cents).
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