Jamaica Teas is hoping for Investments turnaround
Caribbean Money Daily.
For the first quarter ended December 2024, the Jamaican Teas Group posted higher revenue from companies which number seven, ranging from manufacturing to supermarket retail, real estate and investments. Leading in performance was manufacturing exports, which rose 38 percent over the prior year.
Investments continue to underperform. Management stated, “While the market outlook is unclear, QWI may not experience profit growth if the profit results of our main investee companies do not continue their improvements over a year ago.”
JTL’s total revenues for the quarter increased by 9 per cent overall from $840 million a year ago to $913 million this quarter.
Jamaica Teas Group includes six subsidiaries under manufacturer Jamaican Teas Limited: Subsidiaries are Caribbean Dreams Foods Limited which processes local teas which it packages along with imported teas and other foods and distributes for the Jamaican and overseas markets; and LTJ Managers Limited (formerly JRG Shoppers Delite Enterprise Ltd) is a real estate company.
Also included in the group are real estate developers H Mahfood & Sons Limited and H Mahfood and Sons 2020 Limited; investment companies and KIW International Limited is an investment Company and WI Investments Limited also an investment Company (45.64 per cent owned). Finally, there is Bay City Foods Limited operates a supermarket in Kingston.
Increases in cost of sales for the quarter were outpaced by the growth in revenues. As a result gross profit margin rose from 18.5 per cent a year ago to 20.3 percent this quarter. Management noted that this improvement arose in part from the consolidation of two former factory premises into the current factory at Temple Hall which was completed on 31 August 2024. This helped to eliminate expenses duplicated over two premises versus one now.
The lower level of low margin real estate sales this quarter also assisted in the margin improvement. Other expenses were little changed in the quarter except for interest expense which was $4 million lower due to lower debt levels and lower interest rates.
Net profit attributable to Jamaican Teas for the quarter was $53 million, a 12 percent improvement from the $47 million profit in the same quarter of the previous year. Total attributable comprehensive income per share was 2.4 cents (2023/24 – earnings of 2.2 cents)
Although manufacturing sales rose 38 per cent, there was a six per cent reduction in local manufacturing sales which reflected the high level of sales that took place to Wisynco in the year ago quarter as they built their inventories at the commencement of their new distribution agreement which began in November 2023.
In the real estate division two studio sales were booked this quarter versus four in the year ago quarter following the launch of sales at the company’s Belvedere Road project in October 2023.
Booked and / or completed sales at the complex have reached the half way stage with 15 studios sold or under contract to date.
In the retail division, for the quarter revenues amounted to $219 million, an increase of 10 per cent, an uplift which management says reflects a continuation of the accelerated revenue growth seen in recent months.
Investment outlook
In the investment division, the prices of stocks on the Jamaica Stock Exchange Main Market increased although prices on the junior market declined. USA Stock Exchanges improved in the quarter. The unrealised gains in overseas investments were however much lower than a year ago due to declines in the values of holdings in several home building and construction companies as well as a significant decline in the value of the shares of one of the computer companies we held.
Some of these declines reversed themselves in January 2025. QWI Investments Limited (QWI) reporting a small net loss of $10 million for the quarter, a significant reversal from their year ago profit of $18 million.
They noted that reduction in investment income mainly reflects the lower unrealised investment gains of QWI referred to above along with higher realized losses recognized from a higher than usual level of share sales undertaken by QWI this quarter. Higher dividend and interest income compared with the year ago offset some of these unfavourable developments.
QWI halved its share portfolio in Trinidad in the quarter due to the disappointing profit outlook of one of its investees. In addition, the company also exited several other investments due to unexpected adverse changes in the business of several holdings.
The increase in fixed assets since September 2024 is due mainly to improvements made to the Temple Hall premises.
Chairman John Mahfood concluded, “The Jamaican economy is heavily dependent on tourism for foreign exchange and employment and its impacts on the wider economy with its linkages to locally produced goods and services. (Also) The recent decreases in interest rates locally will also improve the prospects for our Group.”
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