May 2016 Financial News

GraceKennedy Q1 rockets by 127%...Only partially due to Hardware and Lumber sale

May 13, 2016

For the first quarter ending March 2016, GraceKennedy Group reported revenues of $22.1 billion, a $2.8 billion or 14.3 per cent increase over the corresponding period of 2015.

Net profit was 127 per cent higher than that of the corresponding period last year, due in part to a non-recurring gain realised on the dissolution of some non-operating subsidiaries during the quarter.

Year-to-date profit from continuing operations increased by $958.1 million or 150.4 per cent compared with the corresponding period of 2015, moving from $637.1 million to $1.6 billion.

In December 2015, the group concluded the Hardware and Lumber Ltd deal in which Argyle Industries Inc acquired 58.23 per cent shareholding from GK at $18.50 per share.

GK included $606.47 million in income during the quarter, being booked as revenue from sale of shares in Hardware and Lumber Ltd which was reported as discontinued business.

On February 29, 2016, the Board of Directors approved an interim dividend of 78 cents per stock unit, to be paid on May 16, 2016.

Directors said that without gain from discontinued business, net profit would have increased by 67 per cent, reflecting the performance of GraceKennedy’s Food Trading and Money Services businesses in particular.

Group CEO Don Wehby said the group’s foods business performed well, with GraceKennedy Foods (USA) LLC making progress with the integration of the La Fe business.

He said both the Grace and La Fe brands have shown double-digit growth, led by strong performance in the North East USA. Grace Foods’ Aloe, Tropical Rhythms and Coconut Water have delivered growth in the USA market’s beverages portfolio.

Grace Coconut Water has maintained its number one position in the Canadian market, Wehby added.

Improved performance also came, the group CEO said, from the Foods Business in Jamaica and GK’s manufacturing and distribution businesses.

Wehby noted that while the Banking and Investments segment recorded increased revenue, it also experienced a reduction in profit which was impacted by restructuring costs and increased expenses related to the new Ocho Rios branch, and new technology solutions for customers.

The insurance segment reported growth in both revenue and profit; while the Money Services segment reported higher revenue and profit, largely due to increased transaction volumes in the remittance business and improved operational efficiency, company directors said.

In February, GKMS launched its remittance business in the Turks and Caicos Islands, making it the eleventh territory in which it operates in the region.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter
Jamaica Observer
Friday May 13, 2016

http://www.jamaicaobserver.com/business/GraceKennedy-Q1-rockets-by-127--Only-partially-due-to-Hardware-and-Lumber-sale_60776