GraceKennedy

In releasing the unaudited results of the GraceKennedy Group’s financial performance for the period ended June 30, 2010, Chairman and Chief Executive Officer, Douglas Orane has announced a new policy for payment of dividends to shareholders.

Mr. Orane disclosed that the Board of Directors of GraceKennedy Limited has approved a new policy for payment of dividends. Under the new policy the company will increase dividend payments to a minimum of 15% of Net Profit Attributable to Stockholders, up from a minimum of 10%. The decision was also taken to increase the frequency of dividend payments from two to three times per year. In a cautionary statement the Board said the policy must be viewed against the background of an unpredictable environment and is subject to available cash flow. A dividend of 50 cents per stock unit was paid on May 27, 2010 to stockholders on record at May 3, 2010.

The Group achieved Revenues for the half year period of $28,066 million (2009: $29,504 million), a decrease of $1,438 million or 4.9%. The Net Profit Attributable to owners of the Company decreased by $377 million compared to the corresponding period of 2009, moving from $1,609 million to $1,232 million a decrease of 23.4%. This represents earnings per stock unit of $3.74 (2009: $4.89).

Mr. Orane said that GK Foods saw a decline in business in the second quarter in the face of reduced sales in most markets due to continuing worldwide recessionary conditions. The Jamaican and Belizean markets were the most seriously impacted by the economic downturn while the company’s North American markets experienced good growth in revenues and profits.

“Grace Foods UK Limited continues to reflect signs of recovery due primarily to its efforts at cost reduction and revenue growth in a very sluggish UK food market.” Mr. Orane said. “The moving of all our inventories into our New Distribution Centre was completed during the quarter and initiatives to extract efficiencies and savings will have increasing effect as of the third quarter. Grace Coconut Water received excellent media focus on main street cable and TV in North America helping the product to grow over 50% in those markets year to date.”

New products launched during the quarter included Grace Blends Sorrel Ginger, 1kg Grace Coconut Milk Powder in the Jamaican market, Nurishment in the USA and Caribbean Choice sauce in the UK. At the recent Jamaica Exporters Award function, Grace Foods International received the prestigious awards for Best Caricom Exporter and Champion Trader for 2009.

Turning to the performance of the GraceKennedy Financial Group, Mr Orane noted that this was impacted by continued weak consumer demand, lower interest rates following the Jamaica Debt Exchange (JDX) and the rapid appreciation of the Jamaican dollar. Within the segment, the Money Services businesses continued their creditable performance with revenues increasing by 6% compared to prior year.

The Grace Kennedy CEO disclosed that the Banking and Investments segment saw improvement when compared to the first quarter, as First Global Bank Limited (FGB) recorded a significant increase in profits while First Global Financial Services Limited (FGFS) acquired a major pension fund client. Both FGB and FGFS implemented several initiatives aimed at improving customer experience at all touch points.

“Though the Insurance segment continued to be affected by reduced investment income, both Jamaica International Insurance Company Limited (JIIC) and Allied Insurance Brokers Limited (AIB) exceeded prior year revenues”, Mr. Orane said.