Jetcon doubles profits as sales outperform expectations
Car dealer Jetcon Corporation, which specialises in second-hand autos, expected a strong year for sales, and had targeted 30 per cent growth.
But auto consumers were a lot more bullish than expected by Jetcon, which ended the year with a 64 per cent improvement in revenue.
Sales across the year totalled $857 million, according to its newly released results for the period ending December 2016. This meant that revenues rode $334 million higher than the $523 million of sales recorded in 2015.
As a result, net profit more than doubled from $40 million to $99 million. Jetcon, which went public a year ago, also reported that its average return on capital rose to a "strong" 49.4 per cent, up from 46 per cent in 2015.
Jetcon Corporation, which is headed by managing director Andrew Jackson and chaired by brother John Jackson, listed on the junior market of the Jamaica Stock Exchange in March of 2016, having raised just under $100 million from an initial public offering. The additional funds were put to work by way of increased inventory and aggressive sales promotions.
The auto dealer also benefited from reduced interest rates.
Strong sales growth
"This paid off with strong sales growth in the post-listing period, backed up by excellent customer service. Reduction in lending rates played a part in increased demand by customers but improvement in the wider economy backed by tax reductions for some workers, along with increased remuneration and the lowest inflation rate in several decades, would all have played a part," said the company in a statement released alongside its earnings report.
Jetcon is already reporting that revenues for the first two months of this year are up 77 per cent ahead of the corresponding period in 2016.
It signals that the company expects to report a good first quarter for the period ending March. It is also optimistic, though cautiously so, about growth for the full year.
"While we cannot say with certainty that the above pace of sales growth will continue for the full year, our budgets, forecast and strategies for the year, is for increased revenues and profit as we work as a team to build the company into one that the stakeholders will view positively," said Jetcon.
Shareholders are already benefiting from the company's outperformance. A dividend of 7 cents per share, totalling $13.6 million, was paid out on March 15.
There are 194.5 million Jetcon shares listed on the junior stock exchange, which currently trade at $11. Directors of the company have announced plans for a three-way stock split, a proposal that is to be voted on by shareholders at the company's annual general meeting later this year.