JP profit spikes 58%, absorbs new Miami business
Jamaica Producers, JP, has absorbed the newly acquired Miami Freight & Shipping Company into the group, but is still quiet on the cost of the purchase.
The food and logistics services group made net profit of $811 million for the first quarter, only half of which was attributable to the parent operation.
“We are pursuing a strategy of getting deeper into logistics and the acquisition was well timed,” Jeffrey Hall, managing director of Jamaica Producers Group Limited, said of the Miami purchase, a company to which JP Chairman Charles Johnston is connected.
The deal for 100 per cent of Miami Freight gives JP a logistics presence in the United States, adding to holdings in Jamaica and the United Kingdom.
Hall declined to comment on the price paid for Miami Freight, saying: “We signed a non-disclosure agreement.”
The company reported the purchase of shares in a subsidiary with a net value of $4.3 million, which appeared to be the Miami Freight investment. Hall confirmed that Miami Freight was the only entity acquired during the period, but cautioned that the figure does not reflect the full transaction value. The deal was struck in January.
More details on the deal’s full value are likely to emerge eventually when the company’s next yearly audited accounts are produced.
The conglomerate has been aggressive in its M&A hunt during the COVID-19 pandemic, acquiring both food and shipping-related businesses.
These new investments contributed $146 million, or 18 per cent, of profit for the group during the quarter. Its purchases prior to this year included Geest Line Limited in the UK, Co-Beverage Labs in Spain, and water and ice company Grupo Alaska in the Dominican Republic.
Overall profit attributable to JP shareholders, after removing non-controlling interest, totalled $406 million, up 58 per cent year-on-year.
JP Group also closed the quarter with about $11 billion in cash and readily convertible securities that it can use to hunt other acquisitions.
The Miami shipping company started operations over 20 years ago in Florida and ships cargo mainly to Jamaica and the Cayman Islands, but also to other parts of the Caribbean. JP Chairman Charles Johnston was also a director in the Miami company. Hall said JP nominees will be added to the board, but the management would not change.
The company offers cargo shipping, on-site packing and crating, storage, and cargo pickup across the US. JP has done business through the company over the years.
“We are a customer, and so are many other businesses in Jamaica. Our Tortuga and snacks business uses them to consolidate cargo,” he said.
Hall described the business as profitable, with the potential to grow its market as well as JP’s earnings.
“It is accretive, and we believe it has the potential to grow through expanding services to the Jamaican community,” Hall said. ”We are targeting a return in line with our general target of north of 15 per cent.”