The management of Mailpac Group Limited, for the quarter and year ending December 31, 2020, said the company exceeded the 2020 projections outlined in its November 2019 IPO prospectus.
The company achieved this by employing a number of strategies to provide better access to online shopping for Jamaicans whose travel and movement were curtailed due to the Covid-19 pandemic.
The company’s IPO prospectus projected that the company would generate profits of JM$317.0 million in 2020, a target surpassed by 39.6 per cent.
Comparative data comes from the three months ended December 2019, the first quarter of operation as a newly listed company on the Jamaica Stock Exchange.
Overall for 2020, revenues topped JM$1.72 billion. However, for the three months recorded in 2019, revenue was JM$361.72 million.
Net profit for the full year was JM$442.72 million, compared to three months net profit of JM$86.28 million in 2019.
Mailpac Group began operations in the final quarter 2019 after consolidating the operations of Mailpac Services and Mailpac Local. The company’s IPO netted JM$495 million from new shareholders.
The group consists of Mailpac Services, formerly MailPac Express, which offers e-commerce fulfilment services from the United States to Jamaica; MailPac Marketplace for cross-border online shopping with local landed prices; Mailpac Local, which facilitates local online shopping and delivery from local retailers; Mailpac Financial Services, for online shopping financing; Mailpac Card, a branded MasterCard for shopping online; and Mailpac Ocean Freight for sea freight shipping and brokerage services.
In remarks attached to the results, Executive Chairman Khary Robinson, stated that the group’s performance in 2020 indicates the shift towards online shopping and Mailpac as its local conduit.
“The pandemic, though adverse in its overall impact on our country, has brought greater awareness to the value of online shopping with the convenience, cost savings and variety of choices being superior to other traditional shopping options.
“It is our belief that this has created a fundamental shift in the way Jamaicans will shop in the future and Mailpac is well positioned to continue growing by efficiently serving this evolution of the consumer market.”
Revenues for Mailpac for Q4 2020 were $512.1 million, which is 41.5 per cent higher than the $361.7 million achieved in the same quarter of the previous year.
Gross profit for the quarter was $231.9 million, which represents a 18.1 per cent increase over the previous year.
Robinson said that due to the significant spike in package volume, gross profit was adversely impacted by extraordinary spending on charter flights and other freight solutions to offset the lack of capacity at traditional airlift channels.
Consequently, he said, Mailpac is currently finalizing solutions to ensure that any extraordinary costs and constraints in airlift capacity are mitigated in the future.
For the year under review, revenue was $1.7 billion with gross profit of $816.2 million.
Operating expenses for the quarter were $110.1 million, coming in 25.9 per cent higher than the prior year comparative quarter as the Company had to significantly expand its operating infrastructure to support the new volume levels, Robinson outlined.
Additionally, Mailpac issued over $20 million in rewards and gifts to customers during its “Bring Back the Joy” marketing campaign.
Net income for Q4 2020 came in at $103.8 million, 20.2 per cent higher than the same quarter of the previous year.
Net income for the year stood at $442.7 million.
Robinson stated, “We are encouraged by the performance of the Company in its fourth quarter as Mailpac has cemented its position as an integral provider to Jamaica’s evolving consumer market.
“More importantly, Mailpac now has the appropriate infrastructure and resources to manage significantly more volume without incurring any additional costs or extraordinary capital expenditure.”
Total assets at the end of the quarter stood at $651.3 million, with $291.8 million of cash on the balance sheet at the end of the period.
Shareholder’s equity stood at $571.4 million at the end of Q4 2020.
It was noted that the shareholder’s equity has been impacted by the $225.0 million in dividends paid out by the Company in 2020.
Robinson concluded, “Our aim is to continue innovating to deepen our penetration of the regional market and serve our customers faster, better and more cost efficiently.”