Lowe takes a bow as CPJ profit trends north
Caribbean Producers Jamaica Limited (CPJ) made a near-250 per cent turnaround in the first quarter ending September, having turned a US$315,650 loss into a profit of US$463,346.
CEO David Lowe, who was handed the helm of the company 18 months ago, sees the results as a vindication of the ongoing restructuring programme that he has been insistent would pay off for the Montego Bay-based business.
The results continue to build on the company's full-year results, ending June, 2017, when CPJ saw a marginal uptick in profit from US$2.52 million from US$2.59 million.
"The restructuring of the business, which began at the start of my first year as CEO, in July 2016, resulted in a strong profit recovery. The restructuring was part of a business transformation to achieve greater efficiency and growth in the future," Lowe said on Wednesday.
"This included process re-engineering, realignment of talent, rationalisation of non-performing product categories, and outsourcing of non-core functions and greater customer and business engagement. In addition, debt restructuring enabled a process to reduce expensive debt and increase free cash flows," he said.
CPJ's short term liabilities climbed by 21 per cent, or US$3.8 million, in the September quarter, which the company attributed to the reclassification of the loan principal on a J$337 million bond due to mature in June, 2018.
The reclassification carved US$3 million off the company's long-term debt. It also cut short-term loans to US$2.5 million, from US$3.75 million.
As CPJ's debt load lightened, the company has been investing in its operations. CPJ said that the US$5 million shelled out for administrative and selling costs in the September quarter were mainly associated with the upgrade and strengthening of its IT infrastructure. It plans to spend US$2.7 million more over the next three years to complete technology projects.
"The end of the first year enabled a business recovery which has continued into our first quarter of this new fiscal year with an updated focus on talent acquisition and development to drive innovation and new market opportunities," Lowe said.
For the 2018 fiscal year: "We believe that the internal drivers for growth and maintaining our market position with our core markets will be made possible by our focus on talent and technology. We plan to leverage our business relationships and logistics platform to generate further growth in the region with exports and expansion offshore," he told the Financial Gleaner.
CPJ is a two-decade-old distribution and manufacturing enterprise, which mainly services the hospitality sector. Its main operations are in Jamaica, but the company has also expanded into the eastern Caribbean over the past four years.
Lowe, a finance professional, joined CPJ in 2012 as vice president for business development, and was promoted within months to chief revenue officer, with responsibility for sales, marketing, and business development. He became CEO in June 2016, replacing CPJ co-founder Tom Tyler.
Tyler remains co-chairman of CPJ, alongside partner Mark Hart.