Updated: 16-08-2024 - 12:00PM 3 12 CLOSED
Aug 05, 2015
THE food and financial conglomerate GraceKennedy (GK) group valued its Hardware & Lumber (H&L) assets up for sale at $3.2 billion while also removing that operation from its segment results.
It's the first time that the group categorised H&L as a discontinued operation in its financial results. The H&L sale is part of a wider move to rid itself of non-core activity which will result in GK shedding its retail & trading segment.
"As part of the group's strategic focus of expanding in the food and financial services sectors the decision was taken to sell our shares in H&L, which is now reported as a discontinued operation. Our segment reporting now comprises four business segments," stated a notice prefacing the financials signed by chairman Gordon Shirley and group chief executive officer Donald Wehby.
The group segments now include food trading, banking and investment, insurance and money services. Overall the GK group made $811.4 million net profit on $20 billion in revenues for its June second-quarter 2015 or 15 per cent less than the corresponding quarter a year earlier.
To reinforce its move to remove the retail and trading segment, its second-quarter financials stated: "The retail and trading operation -- which merchanidises agricultural supplies, home improvement supplies, and hardware and lumber -- is a discontinued operation not presented in the segment results."
H&L major assets up for disposal from the group as at June 2015 include inventories at $1.68 billion, fixed assets at $722.6 million, receivables at $629.8 million, cash and deposits at $163.8 million and other assets at $88 million. The liabilities up for disposal by the group total some $1.79 billion as at June 2015.
In April, GK entered into a conditional agreement for the sale of its 58.1 per cent shareholding in H&L, but avoided naming the interested parties or disclosing the proposed sale price. Then in June, Grace revealed Greystone Equity Partners Inc and its nominee Argyle Industries (Jamaica) Limited as interested parties at a maximum price of J$18.50 per ordinary share. It expects the sale to be completed this year.
GK in its quarterly financials added that the discontinued operations earned revenues of $3.5 billion and expenses of $3.4 billion over six months ending June 2015.
H&L currently comprises two separate divisions - Rapid True Value -- the foremost local supplier of hardware and home improvement products, and the Agro Grace business -- local wholesaler and retailer of agricultural products. There are currently 10 Rapid True Value outlets across Jamaica, along with six Agro Grace retail centres. The company is headquartered at Spanish Town Road in Kingston.
Greystone Equity Partners Inc is a Caribbean-based and Caribbean-focused private equity firm.
Source:
BY STEVEN JACKSON
jacksons@jamaicaobserver.com
Business reporter
Jamaica Observer
Wednesday August 5, 2015
http://www.jamaicaobserver.com/business/Grace-values-H-L-assets-at--3-2b_19222228