KINGSTON, Jamaica – The GraceKennedy Group has reported revenues for the nine-month period of $40,159.1 million (2007: $35,374.5 million), an increase of $4,784.6 million or 13.5%. The Net Profit Attributable to Equity holders of the Company increased by $1.6 million over the corresponding period of 2007, moving from $1,673.4 million to $1,675.0 million.
Despite a very challenging environment, GK Foods had a satisfactory third quarter achieving an increase of 4% and 15 % on sales and profits respectively, when compared with the corresponding period last year. GK Investments, the non-food arm of the business, experienced a marginal increase in revenues over the corresponding quarter in 2007 with lower than projected profits.
Douglas Orane
Chairman & CEO GraceKennedy
GraceKennedy Chairman & CEO Douglas Orane said the major areas of concern for the food business were the impact of rapidly increasing prices from suppliers, notably on dairy and other products manufactured in Jamaica, and the downturn in the UK foodservice business, particularly sales to pubs and restaurants caused by the recession in that country.
However the company continues to launch products which it projects should do well even in the current environment. These include a new low cost cheese, Country Gold, earmarked for sale in Jamaica and export markets. This cheese will sell at approximately 20% below the traditional tinned cheese prices and so far the results have been positive.
In the United Kingdom, Grace Foods UK Ltd. has also developed and launched a number of new products under the Rio Pacific brand which it expects to have a positive impact on the company’s foodservice business. GK Foods continues to pursue its expansion strategy, exploring opportunities in India, Ghana, and South Korea.
Sales of the Grace-owned brands, year- to- date, have grown 12% in US dollars when compared to the corresponding period last year.
During the period, First Global Bank Ltd. successfully negotiated a US$6M loan facility with the Inter-American Investment Corporation to fund loans to small and medium sized enterprises. The bank also booked its third transaction under an Inter-American Development Bank Trade Finance facility. This is a continuation of a strategy geared at engaging the multilateral funding agencies to provide appropriately priced loans to the productive sectors and comes at a time when global credit liquidity is tight.
Allied Insurance Brokers Limited has been aggressive in its pursuit of new business and this has begun to pay off, as a significant part of its growth has come from this initiative. GraceKennedy’s Turks and Caicos subsidiary, First Global Insurance Brokers Limited, purchased the insurance brokerage portfolio of United Reliance International Limited, the largest insurance brokerage in the Turks and Caicos Islands. The acquisition, which became effective on October 1, 2008, is expected to significantly increase the Group’s access to a high growth market.
Money Services, particularly Western Union remittances originating from the United States, grew marginally over the corresponding prior period, despite the economic climate. Mr. Orane noted, “Our plans to rollout new agent locations in the United Kingdom are progressing in a competitive market. We continue to work with Western Union to identify countries within the Caribbean, or where the Diaspora is concentrated, that are beneficial for the Group to transact business.”
While acknowledging the possibility of modest revenue and profit growth in light of the global economic downturn, the GraceKennedy Chairman said his company would continue to focus on a combination of increasing productivity and offering products and services aimed at making the lives of consumers more hassle free.
