JP eyes greater growth to bolster shareholder value
June 23, 2021
Jamaica Producers Group (JP), in an attempt to create more value for shareholders, says that it will, over the next 10 years, move to undertake a series of activities geared towards securing greater growth across its diverse line of businesses.
“We believe we are entering this new era with the capacity to improve our growth position. We have set ourselves a charge to again, over the next 10-year period, try to triple shareholders’ equity in this business, in part, by doing another round of platform acquisitions. This is a major part of the thrust of our organisation and we should put ourselves in a position to have the capital to do so,” said Jeffery Hall, chief executive officer of the company, at their annual general meeting held last week.
Last year, despite the challenges brought on by the novel coronavirus pandemic, the company which operates across food and beverages as well as logistics and infrastructure businesses moved to improve its financial position that saw its cash and liquid assets grow by 40 per cent and overall shareholders’ equity by 17 per cent to $16.1 billion. Total assets at the end of year also climbed to $41 billion.
As for the plans to finance upcoming projects the group said that its cash and borrowing position to fund these objectives remain adequately capitalised to do so. Up to the end of its first-quarter period ended in April the company earned revenues of $5.4 billion coupled with $570 million in profits.
The food and logistics conglomerate last year, following its acquisition of a 50 per cent interest in Geest Line — a shipping line which serves Europe, South America and the Caribbean in its logistic business — and driven by operations at its lucrative Kingston Wharves subsidiary, is further seeking to add more growth to its balance sheet at the end of the current financial year by targeting new opportunities across its businesses.
Kingston Wharves recently announced plans to pump significant capital into its infrastructural development projects over the next 18 months.
Hall said that plans were likewise underway to expand the market for its Hoogesteger juices in the European market as the company also transitions to utilise Pan European trading platforms up from the current Benelux platform. Plans are also being rolled out to spearhead a brand refresh of its JP Tropical Foods line, which includes the popular St Mary’s snack brand, with the addition of breadfruit, cassava and potato chips for the first time. “We are very optimistic about the prospects for growth in this business,” Hall said, in response to questions from the Jamaica Observer’s Business Observer this week.
e however added, “The current area of focus continues to be the development of our integrated logistics network serving the Caribbean. We will also be pursuing investment opportunities to expand the geographic reach of our European juice business and the range of products offered by our Caribbean specialty food group.”
“Hoogesteger now serves Holland, Belgium, Germany and several Nordic countries as well as the Czech Republic. The expansion plan [for this area] will initially target some of the larger European countries with private label juice production,” he further stated.
He said that plans for further concentration of the company’s Tortuga rum, whiskey and bourbon cakes were also gaining traction in US markets, a trend which the company believes will continue to drive revenue in the food segment, especially with the added use of technology.
“Tortuga has done an excellent job at driving growth in e-commerce and in sales in North America outside of the travel retail segment that was affected by COVID-19. Sales benefited from new product innovations to attract a wider range of US-based consumers,” Hall stated, noting that the business will not be left behind as the country and more companies tap into the digital wave of e-commerce, among other technologies, to enable growth and efficiency across their operations.
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