CAC 2000 Limited says the addition of four new products contributed to a seven per cent increase in gross profit margin for the first quarter of 2021, which ended on January 31.
According to CEO Gia Abraham, the introduction of the new products were the direct result of CAC’s partnership with “our customers to identify solutions such as fresh air injection systems, higher efficiency filtration, sterilisation, and improved maintenance services, all of which gained us additional revenues”.
For the quarter under review, the company saw a significant decline in revenues to JM$253.33 million, down from JM$306.56 million in January 2020.
However, lower cost of sales resulted in gross profit JM$113.27 million, compared to JM$114.81 million last year. Cost of sales fell from JM$191.76 million in 2020 to JM$140.06 million at thee end of the quarter.
Cuts in administrative costs contributed to an improvement in net profit for the quarter of JM$7.9 million, compared to JM$1.31 million in the comparable quarter.
The company ended the quarter with total assets of JM$1.1 billion, down from JM$1.18 billion in January 2020.
At January 31, 2021, shareholders equity of JM$396.28 million exceeded JM$368.26 million last year.
Cash and cash equivalents at the end of the first quarter were $88.28 million, down from $195.34 million at January 31, 2020.
“As COVID-19 continues to challenge us both globally and locally, I am pleased to say that our Q1 results continue on a positive trend as CAC seeks to turn challenges into opportunities,” Abraham explained
“The net result was a significant improvement in our Q1 profit before tax compared with the prior year,” she added.
The company’s trade receivables also increased during the quarter under review by 16 per cent due to the slowdown of payments by customers in November and December 2020 (job execution and customers maintaining their cash reserves and delaying payments). The uptick was also attributable to an increase in 2020 Q4 billing and increased contract assets (work done but not yet billable to customers as per IFRS 15).
Abraham said that the implementation of a new Enterprise Resource Planning (ERP) system is still on track for April 1, 2021, and should improve the operational efficiency of CAC through the streamlining of processes.
“We expect that the system will provide more insight and help CAC to focus on improving its operational effectiveness in areas such as inventory days (169 PY vs. 180 LY) and days trade payables (105 vs. 122 LY) and improve our combined cash cycle,” the CEO stated.
She added that the company has started the new financial year with a healthy job portfolio and is “working on some exciting changes and initiatives as we strategically set upon the path to profitable growth”.