Caribbean Producers Jamaica says they're on the rebound after last year's losses

Caribbean Producers Jamaica says they're on the rebound after last year's losses

Failure of new warehouse management software blamed for bad results

BY ANTHONY LEWIS
Observer writer

Wednesday, February 12, 2020

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FREEPORT, St James — Food and liquor distributor, Caribbean Producers Jamaica (CPJ) says it is rebounding from losses in the 2018/2019 financial year, the first in the company's 26 years of operations.

As part of its strategy to bolster financial growth, CPJ will be seeking to take advantage of the country's growing hotel room stock, among other plans.

“I would say we have the building, and now we need the IT (information technology). It is one of the key things that CPJ needs. Secondly, we found that we need to clean our item files. We could go on and on, but a lot of stuff is going on in the back right now.

“Once we get that right with the infrastructure that we already have, with the potential business growth in new hotels and growth within our current categories and the possibility of being in retail, I think we have the potential to grow the business,” stated Thomas Tyler, CPJ's board of directors, co-chairman in his report to shareholders.

Tyler was addressing CPJ's annual general meeting (AGM) held at the Sunscape Splash Resorts in Freeport, St James, on Monday, February 10.

Board Chairman Mark Hart said the losses were a result of the company attempting to implement a new IT warehouse management system (WMS) software to aid with the rapid growth of the company having put in place a distribution centre in St Lucia and evolving into manufacturing.

“The WMS software was supposed to integrate the company's supply chain with logistics and warehousing. The anticipated benefits did not materialise, and as a result, the IT platform was abandoned due to the negative impact on operational efficiencies,” Hart announced to those present at the AGM.

Hart said the experience exposed things that must be done while at the same time, forced the company to make changes.

“Maybe, if it hadn't happened, we would limp along and say we are doing OK. But, what I think has happened is that it allowed us to seize the moment to become world-class and to be much better than we ever dreamed that we could be,” reasoned Hart in his reflection.

Hart then informed that steps had been taken to ensure the successful implementation of another system.

Audited financial statements showed that the group's gross operating revenue ending June 30, 2019 increased to US$110 million from US$108 million in 2018.

However, the company's Chief Financial Officer Vivek Gambhir admitted, “this is the best performance of the group so far.”

Despite the group's record-breaking revenue, it recorded a loss of US$1.17 million. The loss was a result of the WMS software impairment that led to a write-off of approximately US$700,000.

CPJ was able to rebound strongly in regaining some of the losses experienced in the second half of the fiscal year. The company was also able to contain operation losses to less than US$500,000.

Total assets for the group surged by 23 per cent from US$25.9 million to US$31.87 million. CPJ saw a movement of 22 per cent from US$21.5 million to US$26.2 million.

As of June 2019, the company's share price was at $4.88 compared to $5.10 in June of the previous year. Share price at the end of business last week, Friday stood at $4.80.

“As our co-chairman pointed out, we are on a recovery path and we need support from everybody. From the shareholders, from the directors, from our bankers, from our partners and our suppliers, we are on track to have fantastic results this year,” stated Gambhir.

During the AGM, a motion was moved for the reappointment of non-executive directors Camille Shields who joined the board in 2014, Christopher Berry and Konrad “Mark” Berry, who were both appointed to the board in 2016. KPMG was also retained as the auditors for CPJ.


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