Caribbean Cream Limited (Kremi) has grown significantly over the past 14 years since it first acquired and installed an ice-cream mix plant at Derrymore Road in Kingston, says new chairman Christopher Clarke.
Kremi reported a 10 per cent increase in revenue to total J$1.71 billion for the year ended February 29, 2020, compared to J$1.55 billion in 2019.
Revenue for the fourth quarter rose 16 per cent to close at $470.92 million compared to $405.17 million for the comparable quarter of 2019.
Notwithstanding the general downturn in local and world economic activity due to the pandemic, Kremi “is optimistic of sustaining sales as demand for our product has exhibited buoyancy, ” Clarke said in the company’s annual report released this week.
Chairman Carol Clarke Webster commented in the report, “We are pleased to announce that our company is well positioned to withstand the challenges that lie ahead due to the impact of the COVID-19 pandemic.
“Caribbean Cream Limited has always been careful to put aside a large cash reserve for a company of this size and this financial year is no different. At the end of the current financial year, we had a little over $129 million in cash.”
Clarke Webster said the company’s “innovative business model, where we distribute our products directly to customers in communities through our wholesalers, bike and household vendors, continues to strengthen our revenue stream as it has for the past decade.”
Management in its comments said that the company’s growth had been facilitated by an injection of capital from investors on the Jamaica Junior Stock Exchange six years ago, which enabled the company to recruit and train personnel to operate and maintain a state of-the-art machinery for greater efficiency and reliability.
Caribbean Cream Limited, management outlined, was born out of a need to supply the local market with a high quality, but less expensive ice-cream other than the premium Devon House brand.
Scoops Unlimited Limited, producers of Devon House ice-cream, set up Caribbean Cream Limited to service that new market.
For 2019/2020 sales went up by $153 million or 10 per cent, mainly due to increased product offerings, made possible by the installation of a new line for stick-based, frozen novelties, created in-house, under the Kremi brand during the previous year.
Additionally, the opening of a new depot in May Pen to better serve that community positively impacted overall sales, Webster Clarke said.
Net profit for the year ended February 2020, before taxation moved downwards from $103 million last year to $62 million this year.
This was due, management said, to a hike in commodity costs, driven primarily by increased prices worldwide and worsened by the fluctuating exchange rate against the US dollar.
The company responded by minimising the level of price increases to maintain market share.
Clarke Webster said the company has entered a shared service agreement with a related company, Scoops Unlimited.
Under this agreement, finance, marketing, human resources and information technology professional services are shared by both companies and will be centralised at one location. This move will reduce administrative costs and increase productivity by better utilising the working hours of the relevant personnel.