GraceKennedy

Aggressive cost management and customer loyalty are among the factors cited by GraceKennedy Limited for the growth in revenue and profits experienced by the Group for the first half of 2009.

In its interim report to stockholders for the half year period ended June 30, 2009, GraceKennedy reported revenues of $29.5 billion, compared with $27.3 billion in 2008, an increase of $2,174 million or 8%. The Net Profit Attributable to equity holders of the company increased by $447 million over the corresponding period of 2008, moving from $1.16 billion to $1.61 billion an increase of 38%. This represents earnings per stock unit of $4.89, compared with $3.54 in 2008, an increase of 38%. In US dollars, earnings per stock unit was 5.55 US cents (2008: 4.96 US cents) an increase of 12%.

GK Foods showed significant improvement when compared with the prior year. The division credits the 42% growth in its year-to-date profits to the extensive removal of costs from its operations, introduction of new products, and increased marketing initiatives in several markets.

During the second quarter, GK Foods launched the Grace Instant Soy Porridge and Grace Earth Chef Veggie Meals, the latter being a high-fiber, high protein meat substitute made from soy protein concentrate. They are now available in flavoured and unflavoured varieties – Veggie Curried Mutton, Veggie Stew Beef, and Veggie Mince Beef. Additionally, Quick Cook Porridges and Grace Blends were launched in selected Caribbean markets. The quarter also saw the first shipment of Encona hot pepper sauces into the US market. Encona, owned by GraceKennedy since 2007, is the UK’s largest selling hot pepper sauce brand.

The new Distribution Centre on the Bernard Lodge lands in St. Catherine is progressing well and is on schedule for completion by the end of 2009. This new facility is being constructed to accommodate all the company’s existing warehouse activities under one roof and should result in a much more efficient operation.

GK Investments continued its good performance increasing its half yearly profits by 29% over the comparable period last year despite the sustained downturn in regional economies. Results for the period were driven by strong performances in the Money Services, Insurance and Banking and Investment segments. New products launched within the quarter by Jamaica International Insurance Company Limited (JIIC) included the Premier Lady, Premier Suite and Personal Accident Rider policies. 

The division credits customer loyalty for its ability to increase market share in its money services business, noting that it had been able to maintain volumes in a declining remittance market.

The performance of the Group’s retail segment improved when compared with the quarter ended March 2009. However the company reports that the weak retail and construction sector continue to pose a challenge. In his report, GraceKennedy’s Chairman & CEO Douglas Orane said cost saving and revenue generating strategies implemented by Hardware & Lumber Ltd. have begun to work and the company was beginning to see results from its turnaround programme.

Mr. Joe Taffe, Deputy CEO of GK Investments, has assumed the temporary leadership of Hardware & Lumber Ltd. as acting CEO, following the retirement of Mr. Anthony Holness, the former Chief Executive Officer.

On May 26, 2009, GraceKennedy Limited paid an interim dividend of $165 million, which represents a payment of 50 cents per stock unit. 



Posted: July 31, 2009