Jamaica Producers Group Limited reports it has qualified to be 1 of 3 bidders for the Norman Manley International Airport Divestment project.

Today at the  Jamaica Producers Group Limited Annual General Meeting held June 23, 2017 , The Chairman, Mr. Charles Johnston highlighted that JP earned record profits attributable to shareholders of $3.9 billion.  Mr. Johnston  also indicated that the performance of the company was due to the recognition of Kingston Wharves as a Subsidiary.  Gains reported in the divestment of 50% of the Mavis Bank Coffee Factory in the third quarter also contributed to the performance. He then asked the Group Managing Director to focus on 3 items:

  • Moving the head office from new Kingston
  • Joined three companies in a bid for Norman Manley
  • Relocation of Head Office

 

Mr. Johnston then handed over proceedings to Mr. Jeffrey Hall Group Managing Director for a review of the company financials.

Review of 2016 financials:

The Financial Year (FY) 2016 saw a 39% increase in revenue totaling $12.14 billion compared to the $8.71 billion reported in FY2015. The cost of sales for the financial year 2016 also increased by 28% to total $8.58 billion compared to $6.69 billion reported in FY2015. As a result, Gross Profits increased to total $3.56 billion, a 77% growth on the $2.01 billion recorded for the 2015 financial year.

The company reported profit from operations of $728.01 million relative to a profit from operations of $14.66 million reported a year prior.  This followed an increase in Marketing, Selling and Distribution cost by 26% to $816.54 million (2015:$650.53 million) and Administrative and Other Operating Expenses by 49% to $2.02 billion relative to $1.35 billion for the comparable period last year.

JP also recorded a Share of Profit in Joint venture and Associated Company of $446.69 million for FY2016, down from $688.37 million in FY2015; Gain on Disposal of Property, Plant and Equipment and Investments decreased 88% to $52.15 million relative to $432.79 million reported in FY2015.

JP reported Gain on Recognition as a Subsidiary totaling $2.92 billion (2015: Nil), for the financial year 2016. Profit before finance cost and taxation amounted to $4.84 billion relative to $955.05 million in 2015. Finance costs rose 50% moving from $206.66 million in FY2015 to $309.59 million in FY2016.

Pre-tax profits stood at $4.53 billion, a surge of 407% compared to pre-tax profits of $748.38 million in FY2015 while pre-tax profit. Net Profits attributable to shareholders increased by 397% to end the period at $3.94 billion compared to $792.26 million in FY 2015. Earnings per share for the FY2016 amounted to $3.51 (2015: $0.71). The number of shares utilized in the computations amounted to 1,122,144,036 units.

Revenue breakdown

Food and Drink business saw increased revenues due to Tortuga and the snack business. JP Farms had a tough year due to the adverse weather conditions, however Mr. Hall expects going forward the farm should improve. The Managing Director also stated that the company saw additional expenses due to the restructuring of the Tortuga line of business by moving most of its operations to only two locations moving from ten. The company has also made decisions to onboard customers as they managed to obtain a large scale market in Europe which has helped to reduce its distribution cost.

Additionally, Logistics had a strong year through the acquisition of Kingston Wharves and its improvement on the plant and equipment that drives the terminal.

Corporate services division recognized two gains. This was recognized from Mavis Bank coffee divestment which was bought in 2012. The sale of Mavis Bank represented a “65% return on investment”. The recognition of Kingston Wharves as a subsidiary means that the company will now see its line items being reflected in JP’s financial statements. Mr. Hall also stated that “JP saw 37.8% return on equity and Market Capitalization moved to $10.4 billion as at year end with share price as at year end 2016 $9.23”.

JP Now

Mr. Hall stated that 2016 Kingston Wharves was nominated best multi-purpose port, while Tortuga was nominated as best Food Souvenir for 2016. Last Year A.L. Hoogesteger JP juice brand located in Norway launched 120 new juice products and is a leader in new juice product development and technology in Norway. They are now supplying the leading supermarket chain in Belgium, Germany and Scandinavia. According to Mr. Hall “The strategy implemented by JP is to build and diversify international specialty food groups. To develop and provide world class logistics and infrastructure in the Caribbean.”

Outlook

Mr. Hall stated that the company is confident in its ability to assess and fund investment opportunities. Over the last few weeks JP has qualifified to be a bidder in the Norman Manley International airport Divestment. The company also believes investing in the waterfront is an important strategy for the company. As such the company has decided to relocate from its offices in New Kingston to its new office located at the waterfront. This property is next door to the new Tortuga factory to be finished this year and will help in the logistics and distribution of the company’s products with majority of these businesses being located on one complex.

Looking forward, JP intends to continue to harvest the full potential of each of its businesses by improving operating discipline and performance, driving organic revenue growth through new markets and new products. The Logistics and Infrastructure is focused in a new region, Caribbean and Latin America, where the overall economy is forecast to expand by 1.8% in 20173 the investment programme according to JP has taken this into consideration. Additionally, the Food & Drink division, operates in a traditionally challenging and competitive environment. The company has an installed capital base that which will be leveraged through volume. JP indicated, “we will continue to focus on reallocating our overheads from administrative to commercial sources to drive growth and eliminate underperforming products and business lines. as a group we have an ambitious business development programme in place to achieve improved shareholder returns. We are satisfied that the Group structure and the management team have embraced the ambition of our board and shareholders and we are optimistic for the next phase of the Group’s development.”

 

 

2017-06-26T18:59:53+00:00