Date: March 20, 2019
Jamaican Teas (JAMT) held its Annual General Meeting today, which was hosted by the Company’s Chairman, Mr. John Jackson. Mr. Jackson, in his opening remarks, highlighted that “Jamaican Teas completed a successful year in which Total Comprehensive Income increased 25% from $192 million last year to $240 million in 2018.” He further highlighted that, “IFRS 9 is now in operation as such, total comprehensive income will now be reflected as net profit for the period.”
The Company’s Chief Executive Officer (CEO), Mr. John Mahfood, indicated that, “in 2018, there was an increase in export sales to 57% of total revenues from 50% in 2016.” It was noted by the CEO that, “almost all of the markets in which the Company operates showed growth with exports increasing by 24% and local sales by 12%.” Additionally, the fastest growing products during the year were non-teas that were manufactured by third parties under contract which unfortunately carried the lowest profit margins.
During the year, the packaging of a number of the Company’s Caribbean Dreams herbal teas were redesigned in order to improve visual appeal to consumers. Whereas, the suppliers for the Company’s water business were changed, keeping in line with consistent supply for distribution. Notably, the Company has included some soup and seasoning production in house from external contractors.
Alternatively, Mr. Mahfood provided some insights on the corporate developments that were undertaken in 2017 to date. In 2017, Jamaican Teas reported non-recurring $29 million gain in the initial acquisition of KIW International Limited. In addition, a new subsidiary company, QWI Investments Limited, was formed which will take over the management of the listed investment portfolios of KIW and Jamaican Teas which is expected to result in the continuation and improvement of the high level of investment returns experienced by the Group. Mr. Mahfood stated that, “the Board is currently working on the prospectus for QWI Investments which is anticipated to be listed on the main market of the Jamaica Stock Exchange by May/June 2019.”
With respect to the Group’s investment properties, the Orchid Estate housing project in St. Thomas was completed in November 2017 in which all the houses have been sold but two sales contracts are still in the final stages of completion. However, the real estate business has been unprofitable. As such, the Group plans to on start selling in late 2019, hence, no revenue will be recorded for that division. Furthermore, the Group’s rental properties in Kingston appreciated during the year. In August 2018, construction began on Portview Manor, 18 super studios on lands owned in the Manor Park area which is expected to be completed in 2020 and yield positive returns for the division.
Range of Pasta (Macaroni Shells, Penne and Spaghetti) under Caribbean Dreams brand
- For exports markets only.
- Already shipped to Grenada and St. Vincent with strong interest from Trinidad
Expand range of teas
- Premium range of fruit and dessert flavoured teas
- Target millennials, upper middle class to upper income earners, hotels and mainstream USA retailers
Tetley Boost and Tetley Immune Vitamins
- ‘Superteas’, formulated for therapeutic purposes
- To be launched summer 2019
- Pharmacies and Modern Trade
New Soups and Spice Division
- Machine procured, lines up and running since December 2018.
- Should result in improved margin on soups
- Contract packaging arrangements maintained
Jamaican Teas’ CEO highlighted the following plans for 2019:
- Increasing customer count and basket size at Shoppers’ Delite supermarket
- Additional investment properties acquired in downtown Kingston for rental to industrial tenants with plans for further additions
- QWI fully operational as pure play Financial investment Company with a new Board of Directors
- Continue to accelerate domestic tea sales growth and export business
- Machines to be added to allow for the manufacturing of Caribbean Dreams packaged soups as well as certain types of seasoning and dried sorrel, mainly for export
- Improved food sales margins through a new raw material source that has been found for one of the Company’s important non-grocery products
- Monitor the available opportunities for the real estate and financial investments
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