GraceKennedy

Hardware and Lumber Limited has reported 2011 third quarter revenues and net profit of $1,534 million and $7 million, respectively, compared to $1,340 million and a net loss of $7 million for the comparative period in 2010. The revenue represents a 14% increase over last year’s performance. For the nine months ended September 30, 2011, revenues and net profit were $4,556 million and $5 million, compared to $4,182 million and net loss of $14 million for the comparative period in 2010. This represents a 9% increase in revenues. This was disclosed today (October 24) by Hardware and Lumber’s Chief Executive Officer, Simon Roberts. Hardware and Lumber (H&L) is a division of the GraceKennedy Group.

Mr. Roberts noted that, despite increased revenues and gross margins, results have been broadly offset by increased post-retirement, transportation and utility costs.

“Revenues in the retail segment increased by 6% for the nine months, compared to 2010,” he further noted, crediting improved product mix and margin management for an 11% increase in gross margins, when compared with the corresponding period in 2010.

“While this has translated into significantly reduced losses in the segment, we continue to focus on improving supply chain management and product mix variation to ensure profitability,” he stated. “In the wholesale segment, despite a revenue increase of 14% for the nine months, margins were reduced due to competitive pricing pressure. In addition, rising transportation costs continue to present challenges for the division.”

Mr. Roberts further disclosed that the Agricultural segment of the company, Agro-Grace, recorded a 12% increase in revenue for the nine months, compared to 2010. For the period, the segment sold higher volumes of lower margin products resulting in reduced gross margins.

“Demand for our products is growing, and we continue to provide technical assistance and training to farmers aimed at enhancing their yields and productivity,” the CEO added.

Late in the quarter Hardware and Lumber completed the revamping of its Rapid True Value (RTV) Montego Bay and Ocho Rios stores.

“We expect this to translate into improved performance at these stores going forward,.” Mr. Roberts said. “We have made significant Improvements in order turn-around time for our wholesale customers, and have seen significant improvements in our quarterly customer satisfaction scores in all three divisions. Inventories have trended down during the quarter, as planned. We expect the remainder of 2011 to show further improvement, as we continue to make changes to attract and retain our customers, while ensuring improved cost management and margins.”

GraceKennedy’s Group Chief Executive Officer, Don Wehby, in commenting on the performance of the company, said : “We are satisfied that the company is on track to turn around the negative performance of previous years, but there is still a lot of work to be done. However, we remain focused on satisfying the needs of our customers, and paying keen attention to operating efficiencies and working capital management. We expect that the rest of 2011 will be challenging, given the economic environment, but we also expect to meet our targets.”