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Jamaican Teas looks to expand

Tea maker, real estate developer and retailer  Jamaican Teas Limited is enjoying rising sales, which it hopes to replicate in 2021.

The directors note that overall sales increased by 47 per cent in October 2020, with export sales increasing by 85 per cent and domestic sales by 10 per cent.

(File photo)

They further disclosed the company’s plans for “a major expansion of the factory to meet and prepare for continued growth”.

“We have good orders in hand for November and these developments, along with booking of more real estate sales and hopefully, improvement in the investment portfolio, should result in a good first quarter for the financial year 2021,” the directors said in comments attached to financial statements.

For the year, revenues totalled JM$2.2 billion compared to JM$1.29 billion at year-end October 2019.

Total comprehensive income attributable to shareholders, however, for the year was $210.3 million, down from $395.7 in 2019.

Earnings per share for this year reached 30 cents per unit, compared to 57 cents at October 2019.

Sales performance

According to the directors, the sale of 12 units at the Manor Park complex contributed JM$248 million to the total revenue in the final quarter of 2020.

For the year, the 70 per cent increase in sales included a 49 per cent increase in export sales; seven per cent increase in domestic sales; the inclusion of 12 months’ supermarket sales compared with four months in 2018/19; and the sales of the Manor Park apartments, for which there were no comparable sales last year.

In the final quarter, the company reported a reversal in investments and other income from JM$553 million to a loss of JM$433 million, primarily as a result of the heavy unrealised losses QWI experienced in its shareholdings in financial businesses during the second quarter, due to COVID-19 and its negative impact on many business operations.

“The investment division had a bumper 2019 but faltered in 2020 as a result of the impact of COVID-19 on the economy, which depressed the local stock market as well as the value of stocks worldwide,” the directors outlined.

“We have good orders in hand for November and these developments, along with booking of more real estate sales and hopefully, improvement in the investment portfolio, should result in a good first quarter for the financial year 2021.”

In the final quarter, export sales rose 65 per cent over the prior year.  The directors also noted that domestic sales also did well “against the background of a slow-growing economy that suffered a sharp fall in the second half of the company’s fiscal year”.

Local manufacturing sales increased 17 per cent compared with the previous year.

Overall, sales climbed 44 per cent to JM$407 million in the final quarter of the year.

Profits and outlook

Net profit attributable to Jamaican Teas for the third quarter was $131 million, a decline of 27 percent from the $180 million profit in the corresponding quarter of the previous year.

The decline in profit arose from lower stock market gains. The directors noted, meanwhile, that proceeds from its QWI IPO in October 2019,  included in receivables at the end of September 2019, were invested in additional quoted equities as well as in reducing accounts payables related to the initial public offering.

In their outlook, referring to rising sales and exports, directors stated, “We have good orders in hand for November and these developments, along with booking of more real estate sales and hopefully, improvement in the investment portfolio, should result in a good first quarter for the financial year 2021.”

The company paid a capital distribution of six cents per share in October 2020.