GraceKennedy reports $78 billion of revenue
GraceKennedy Limited has racked up a new record year for revenues, but large expenses linked to inventory and other costs of doing business, plus a larger salary bill, have squeezed the conglomerate's profit margins.
For 2014, GraceKennedy reported revenue of $78 billion, up from $67 billion the year before - the majority of the gains were made across its foreign markets - but operating profit dipped marginally to $4.9 billion, while pretax profit was down to $4.8 billion.
That compares to operating profit of $5.05 billion and pretax profit of $5.07 billion in 2013.
At the bottom line, GraceKennedy reported a small $5 million gain in net profit to $3.8 billion, but it only got there because of a reduced corporate tax bill. Last year, the conglomerate paid income taxes of just over $1 billion, compared to $1.2 billion the previous year.
GraceKennedy's operating margin fell from 7.5 per cent to 6.3 per cent, while its net profit margin narrowed from 5.6 per cent to 4.9 per cent.
The near 16 per cent growth in group revenue comes as GraceKennedy is rolling out its strategic plan under which it aims to reposition itself as a global consumer group.
Jamaica remains its top market by a wide margin, with sales of $44.6 billion, up from $43.03 billion, with the United Kingdom, $13 billion, and United States, $9.55 billion, rounding out the top three.
As a bloc, the overseas markets accounted for $33 billion of group sales, up from $24 billion. Proportionally, GraceKennedy's home market accounted for 57 per cent of revenue in 2014, down from 64 per cent the previous year - a shift that aligns with its plan global programme.
The company will pay dividend of 75 cents per share, $248 million, on May 18.
Last year, GraceKennedy shed one of its financial subsidiaries in Jamaica, upgraded other businesses, including the Hi-Lo supermarket chain, expanded its insurance stake in St Lucia, strengthened its market presence in Western Africa and Europe, and bought a new food business, La Fe, in the United States. The conglomerate says La Fe will be a game changer for the group, which gives it an in to the mainstream grocery market in the US.
The group shed both assets, down $7 billion to $102 billion, and liabilities, which fell from $74 billion to $63 billion - leading to an improvement in its net value, which rose from $34 billion to $38 billion.
This year, the company is expected to roll out a mobile money service through subsidiary GraceKennedy Money Services.