Aug 2012 Financial News

GK Foods gets more 'saucy' in Europe

Aug 01, 2012

GraceKennedy has added 900 new distribution points for its Encona range of sauces, and is reporting positive sales growth in the United Kingdom through large supermarket channels.

The conglomerate has also cited sales growth in its larger European and Africa markets, leading to a J$1.1 billion boost in food trading revenue at half year.

Profits fell by J$69 million to J$1.28 billion, year on year, despite a near six per cent gain in revenue to J$30.6 billion in the six-month period ending June 30. For the second quarter, profits fell by J$110 million to J$561 million.

"This was largely driven by a tighter domestic market and supply issues with some key products and increased operational costs," GraceKennedy said in its half-year report to shareholders.

The conglomerate splits its businesses into two main divisions: GK Foods and GK Investments.

Positive outlook

The latter incorporates its financial assets, which GK said had mixed results.

"While First Global Bank continued to experience improved profitability due to strong growth in loans and deposits, First Global Financial Services experienced a decrease in profitability due to reduced interest income and trading gains," the company reported.

The banking segment produced $332m of pretax profit, down from J$460m made at HY 2011.

Pre-tax profits were down in all segments, excluding money services.

Still, group CEO Don Wehby is bullish about GraceKennedy's performance.

"We have grasped the opportunities and withstood the challenges," he said. "We believe we have the right strategies in place to ensure consistent growth of the company."

Money services profits rose from J$676m to J$774m; food trading, which is the second most profitable segment, slipped from J$499.17m to J$498.82m.

The troublesome hardware and lumber business, which involves the retail and wholesale of building materials, home-improvement supplies, household items and agricultural products, contributed J$18 million to profits, compared to J$38 million in HY 2011.

GraceKennedy will pay a more generous interim dividend of 70 cents per share on September 26, based on these results, compared to 60 cents per share distributed in May.


Source:
business@gleanerjm.com
Jamaica Gleaner
Wednesday August 1, 2012

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