Wed | Feb 19, 2020

AMG moves forward with plan for new property

Published:Friday | January 17, 2020 | 8:02 AM

Managing Director George Hugh peruses the annual report at AMG Packaging and Paper Company Limited’s annual general meeting in February 2018.
Managing Director George Hugh peruses the annual report at AMG Packaging and Paper Company Limited’s annual general meeting in February 2018.

AMG Packaging & Paper Company Limited has secured a contractor for the build-out of a second plant at neighbouring property, 12 Retirement Crescent, following approvals from the Kingston and St Andrew Municipal Corporation.

AGM acquired the property which adjoins its current facility at 9 Retirement Crescent in Kingston during the second quarter of 2019 and later secured funding from Proven Wealth for the development of the facility. The company first pitched plans to use the adjoining property to alleviate space constraints in the existing facility, but it appears those plans have since changed.

“The company is still in the investigation for new equipment that will assist with production speed and efficiency,” AMG Managing Director George Hugh said in a statement to shareholders appended to the company’s financial report for the first quarter ending November 2019. Up to press time, the Financial Gleaner was unable to reach Hugh for an estimate of capital expenditure on the new development, or on what the final plans are for the facility.

He noted in the statement that the company has joined the Independent Packaging Association to assist with finding equipment fitting the business model as well as for future projects.

Work on the new property is expected to begin over the next six months.

Over the past year, AMG Packaging has been working to recover losses from the toilet paper manufacturing business, which it has since exited.

In its last financial year ending August 2019, the company grow revenue six per cent to $763 million, a gain that followed announced price increases by the box maker to offset the cost of paper inputs.

For the quarter ending November, revenues of AMG Packaging dipped 10 per cent from $213.92 million in the comparative quarter of 2018 to $191.6 million. As a result, net profit of the company showed a decrease of 9.77 per cent, from $16.05 million to $14.48 million, partly attributable to rising administrative expenses.

AMG closed the quarter with total assets of $727 million, up from $687.6 million the year before, and cash holdings that more than doubled to $135 million from $50.9 million.

karena.bennett@gleanerjm.com