Derrimon looks to region for retail expansion
Derrimon Trading Company, a distribution company which also operates two supermarket brands, says it is now strong enough to consider expanding regionally, three years after going public.
The company operates Sampars and Select Grocers, and distributes NestlÈ products as well as its own food brand Delect. Select was launched earlier this year after Derrimon acquired the super-market assets of Carihome in Manor Park and rebranded to target a more upmarket clientele.
"We will continue to do acquisitions and not necessarily only in Jamaica," said Derrimon chairman and CEO Derrick Cotterell as the featured guest at the latest Mayberry Investor Forum on Wednesday. Mayberry Investments is Derrimon's financial adviser.
Derrimon sees "tremendous" opportunity in Jamaica, in North America, United Kingdom and the Caribbean, Cotterell told the forum.
"I will share this with you there are parts of the world where it's like Jamaica 20 years ago, and some, 10 years ago. And we know pretty much what will happen in those countries, in regards to how their retail trade and certain aspects of their business will be organised, because we have already had the Jamaican experience," he said.
Derrimon remains cautious, however, about expanding overseas and continues to observe the markets for the right opportunities to strike.
"We are very careful, and look at things over and over," Cotterell said.
The company operates seven supermarkets and an online store. Two of the supermarkets were opened this year stores. Derrimon acquired the assets of Chris Ryan Limited and rebranded the former Empire Supermarket at 1-3 Retirement Road in Cross Roads to Sampars; then it finalised a joint venture agreement and concluded the purchase of the assets of Caribbean Home Entertainment Systems Limited former operators of Carihome Supermarket Limited which was rebranded as Select Grocers.
"We are now really poised for growth. A lot of the stuff we can now do more efficiently - and take on more," Cotterell said. "We do not have to do one store or two store acquisitions, we can now take on a whole chain of stores whether in Jamaica or elsewhere."
The acquisitions have been helping to boost its performance. Derrimon's gross profit climbed 30 per cent to $244 million on revenues of $1.4 billion for the first quarter ending March. Net profit grew 11 per cent to $29 million despite increased finance costs.
During the quarter, Derrimon also purchased an additional 26 per cent of Caribbean Flavours & Fragrances, pushing its stake to a majority 75 per cent.
"I am not saying we are going to do acquisitions overseas next week or next month, but probably the month after that," he teased, eliciting chuckles from forum participants.