Executive Chairman and Interim CEO of Caribbean Producers Jamaica (CPJ) Group indicates that while the company reported revenues of US$26.45 million for the quarter ending March 2020 [Q3], sales have since fallen.
Group sales for the latter half of March 2020 to now have been severely impacted by the unexpected shutdown of hotels both onshore and offshore due to the COVID-19 global pandemic, he outlined in a Jamaica Stock Exchange notice.
Hart said, “Unavoidably, the global shut-down has impacted the financial performance of the Group for the remaining six months of the current fiscal year, adversely affecting the strong sales and profitability the Group had achieved in the first six months of the current fiscal year.”
The impact on the sales and profitability of the company has resulted in lower than anticipated EBITDA for the fiscal year ending June 2020, he noted.
“We foresee that tourism will continue to be at the forefront of GOJ’s economic strategy to lead the post-COVID recovery…”– Executive Chairman of Caribbean Producers Jamaica, Mark Hart
To counter these effects, the company since April 2020 began focusing on direct to consumer marketing, leveraging its presence on social media platforms, Hart outlined.
He said the company has achieved “considerable success in building a strong customer following, which has assisted the achievement of better than expected retail direct sales.”
The Group has also restructured its work force, slowed down its imports and set its focus on depleting inventory at risk.
Further, the Group has embarked upon new IT initiatives to methodically and systematically upgrade key software tools and processes necessary to run an efficient supply chain business, focusing on a new release of Great Plains, new warehouse management and demand planning software to name a few.
CPJ also embarked on a collection drive and managed to reduce accounts receivable from US$15M as at end of March, to US$6M currently.
It also renegotiated deferment in payment terms with its suppliers “on a mutually acceptable basis,” said Hart.
CPJ has continued to reduce its account payables which are now below US$4M. The company also reduced short-term loans with Bank of Nova Scotia and deferred the principal payments on long-term loans, successfully negotiated reduction in lease rentals and reduced interest outflows on all related party loans by half.
Hart stated that the expectation is that a solution to the COVID-19 pandemic will be available soon and expects some normalcy to be restored in the usual busy season from December 2020 to March 2021 and beyond.
He noted, “The Group is closely monitoring the tourist movements as a result of the current pandemic situation.”
The Jamaican borders were open to inbound flights for tourists effective June 14, 2020. The company expects a turnaround and an increased off take in its sales to the hospitality industry effective July 2020.
He said that CPJ has plans to strengthen its IT platform for growth and to accommodate announced plans for new hotel investments and room expansion.
He concluded “We foresee that tourism will continue to be at the forefront of GOJ’s economic strategy to lead the post-COVID recovery and will also provide the impetus for sustainable growth for the near and longer term.”