Alexander Melville, managing director of Tropical Battery Limited, in his letter to shareholders in the company’s new annual report says the company remains well positioned following its Jamaica Stock Market (JSE) entry via IPO in 2020.
He reiterated that, as a part of a Strategic 2021 Growth Plan, the company is moving ahead in identifying acquisitions and partnerships with “aligned profitable companies in Jamaica and across the Caribbean region”, and has entered into discussions with “several key partners to assist in identifying suitable acquisition targets”.
For fiscal year 2020, revenue for the automotive battery seller reached JM$1.87 billion or 7.1 per cent above 2019.
Gross profit percentage was 30.5 per cent , above the prior year’s 30.2 per cent.
Melville outlined, “In dollars, we grew gross profit from [JM]$514 million in FY 2019 to [JM]$569 million in FY 2020, notwithstanding slowdowns in sales associated with COVID-19-related lockdowns, particularly in March and April 2020.”
The managing director said that while earnings per stock unit declined year over year, this was largely a result of non-recurring and non-cash charges.
At year end September 30, 2020, net profit before tax was JM$61 million, down 30 per cent when compared with FY 2019’s JM$87 million. Likewise earnings per stock unit was JM$0.03 per share versus JM$0.08 in FY 2019.
The seventy year old company has its headquarters in Kingston, with distribution centres in Kingston and Montego Bay.
Its five retail stores are in Ocho Rios, Mandeville, Montego Bay with two in Kingston. The company has approximately 1,000 resellers.
A major distribution company in energy storage, the Tropical Battery’s core business is the sale of automotive batteries, automotive consumer product brands, as well as its own Caribrake fluids — which it touts as the market leader in Jamaica.
The company also distributes recognisable foreign brands of oil lubricants and its own brand. It also sells coolant and auto-cleaning accessories.
“In dollars, we grew gross profit from [JM]$514 million in FY 2019 to [JM]$569 million in FY 2020, notwithstanding slowdowns in sales associated with COVID-19-related lockdowns, particularly in March and April 2020.”— Alexander Melville
The company also exports more than one million metric tons of spent batteries each year, earning US dollars.
Melville stated in the annual report, “Operationally, we are pleased that we were able to navigate the impact of COVID-19, protecting the health and safety of our employees and customers, as well as increasing revenue, gross profit and net profit before depreciation, net finance costs and taxation.”
The company head said that available cash the company’s strong balance sheet “position us well to achieve our growth objectives into new product lines and markets/countries as well as fund strategic acquisitions.”
He outlined that the Company’s supply chains remain intact, despite some late shipments experienced from suppliers in the United States, South Korea and Colombia in the year ended.