Margaritaville pays nearly US$4m in buyout of Express Catering
Goddard Enterprises Limited sold its 25 per cent stake in Express Catering Limited, resulting in Margaritaville Caribbean Limited (MCL) taking full control of the Jamaica-based provider of airline meals.
Express Catering supplies much of the food and beverage at the busiest airport, Sangster International in Montego Bay.
The deal was reported last year but at the time MCL, led by Ian Dear, would neither disclose the other party involved in the transaction nor the sale price. Now, the latest MCL financial report released last week month shows that MCL paid out US$3.8 million ($490 million) to acquire the minority interest in an unnamed entity.
And Goddard, in its own recent annual report, disclosed the sale of its 25 per cent interest in Express Catering to the majority partner, Margaritaville.
On Thursday, Dear also confirmed the transaction and the rationale for the deal.
"We are very bullish about expansion of the Sangster International Airport, which is primarily being driven by the impressive growth of the tourism sector in Jamaica," he told the Financial Gleaner.
"This is Jamaica's tourism gateway. We see this trend continuing along with other similar airport opportunities. The purchase of the Goddard's interest, who were great partners, is a reflection of our strategic outlook of continued confidence in the growth of our brands and business."
Express Catering revenues from the Sangster International operations totalled US$14 million in Margaritaville's last financial year, which wrapped up May 2016.
Goddard holds different assets in Jamaica, but just last week it exited its investment in National Rums of Jamaica, a 31 per cent stake, when it sold its subsidiary West Indies Rum Distillery to a French company.
The Barbadian conglomerate, which operates in some 23 countries, still has a presence through the Fidelity Motors Nissan dealership in Jamaica, and other subsidiaries such as Jamaica Dispatch Services, Goddard Catering, and Label Craft Jamaica.
Margaritaville Caribbean, in its latest financial report, disclosed a net loss of US$629,400 over six months ending November 2016, on flat sales of US$16.3 million. Earnings were affected by weather conditions which led to the cancellations of a number of cruise ship calls during the period. A sizeable portion of MCL revenues are derived from cruise passengers which patronise Margaritaville bars and restaurants.
"The Caribbean tourism product is always susceptible to disruptions associated with changes in weather patterns. However, the cancellation of 22 ship calls in one location is the highest that we have ever recorded for any one quarter," said Dear in a statement released with the earnings report.