Thu | Feb 20, 2020

BUSINESS: Caribbean Producers posts healthy profit

Published:Monday | February 6, 2012 | 12:00 AM

The Montego Bay-based Caribbean Producers Jamaica Limited (CPJ) has reported improved performance for the six months ended December 2011, with net profits increasing by 63 per cent to almost US$832 thousand, from US$510 thousand during the corresponding period the previous year.

With that performance, CPJ said it has fully recovered from a fall-off in profits seen in the first three months of its financial year.

The company, which operates in the hospitality industry as an integrated food service distributor, says it is set to increase profits further from several initiatives it has planned.

CPJ says it expects to see an increase in the rate at which it sales grow with the start up of a state-of-the-art plant this quarter and the construction of another warehouse.

But a figure on the projected growth in sales was not given in its financial report to the Jamaica Stock Exchange.

"In support of the processing plant and the overall expansion of the business we have started construction of another 10,000 square feet of warehouse space," the company said.

"This facility will house materials and offices for our chemical and system sales division."

Additionally, as the company aims to intensify its strategy to grow through development and acquisition of retail brands, CPJ said its market facility on Lady Musgrave Road, St. Andrew is to come on stream by the end of the financial year.

Ahead of the launch of that facility, CPJ is seeking partners for a 7,800 square feet two-storey retail shopping and dining complex which cost some J$80 million to develop.

CPJ projects annual income of J$300 million from the facility.

While the company did not disclose the details, it said further expansion is also anticipated for its pool and chemical division through a strategic alliance with a major international corporation.

But as the company seeks to expand, it is also cognizant of rising costs which it says it is monitoring closely.

While fuel and electricity costs rose by 30 per cent and 26 per cent respectively during the reporting period, selling and administrative expenses were down.

The company said a reduction was also seen in finance costs as the company used proceeds of its initial public offering to pay down debt.

CPJ last traded on the JSE at $2.39 with its more than one billion ordinary shares valued at $2.6 billion.