JP looks to acquisitions
Jamaica Producers Group, JP, holds more than $6 billion in liquid assets that it can deploy for acquisitions.
Few companies are in acquisitive mode with the downturn in the Jamaican and global economy, but the food and logistics conglomerate believes now is the time to seek out bargains.
“It is more than a statement – we are actually interested in acquisitions,” said JP Group Managing Director Jeffrey Hall. “We have a strong appetite to do deals. We believe the present environment will offer deals to emerge,” he said.
The company holds cash of $1.1 billion and $5.4 billion in convertible securities.
Hall said JP’s resilience during the current crisis has positioned it to buy up assets, but he sidestepped comment on the prospects for takeover.
In the quarter ending March, JP’s group equity improved to $28.2 billion from $27.6 billion in December. The bulk of the impact of the pandemic would manifest in later quarters, including the adjustments made by the company around its operations in St Mary, which was locked down under quarantine earlier this month.
However, Hall says the diversification of the group, which is spread across various business lines and geographies, augured well for JP’s future performance.
“We made an assessment on a business-by-business basis on revenue and costs, and based on that assessment we should make a profit,” he said.
For the March 28, 2020, JP recorded an eight per cent rise in revenue to $5.2 billion and an uptick in profit from $511 million to $559 million, inclusive of the performance of port subsidiary Kingston Wharves Limited. However, net profit attributable to shareholders fell four per cent to $220 million.
“We view the diversity of our business as a strength. In addition to providing some resilience to our operating income, it also positions us well to consider business development and acquisition opportunities in a wide range of markets,” the company said in its first quarter earnings report.