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Jamaican Teas profit jumps $39 million

BY KARENA BENNETT
Business reporter
bennettk@jamaicaobserver.com

Wednesday, January 03, 2018

Jamaican Teas Limited (JTL) posted profit of $192.4 million for its year ended September 2017, an increase of $39.6 million compared to the previous year.

The growth in net profit was bolstered by other operating income which improved 72 per cent year over year to total $104 million as at year end 2017. The company saw increases in interest income, rental income, gain on the sale of investment, fair value gain on investment property, and gains on the disposal of investment property.

It also recognised gains of $29.1 million on the acquisition of 42.59 per cent ordinary shareholding in KIW International Limited, which was later consolidated as a subsidiary of JTL. But in August, Group CEO John Mahfood announced that the company had sold its interest for just over $200 million.

The company is now looking to reinvest half of the available funds into real estate developments on Red Hills Road and another in the vicinity of Barbican — both in St Andrew.

Group revenue of JTL also climbed to $1.5 billion over the $1.2 billion reported in 2016, led by $100 million growth in both export sales along with property sales and rental. The company almost tripled cash and cash equivalents for the year to close at $56.5 million over 2016's $15.3 million.

The tea maker completed its sixth year of listing on the Jamaica Stock Exchange. Since 2010, it ventured into estate projects, as well as growth in its supermarkets and consumer brands of Tetley Teas, Caribbean Dreams and Jamaica Blue spring water products.

But in 2016, the board of directors took the decision to dispose of the supermarkets in Montego Bay and Savanna-la-Mar, despite the fact that the operations in Savanna-la-Mar had begun to generate a profit on a monthly basis in the second half of the year.

Concurrently, JTL introduced eight products to the market, created a new Tetley logo, and redesigned the display boxes of the Tetley range of products last year to depict a more contemporary look. Tetley is the second-largest tea brand globally, with a heritage of more than 175 years and brand presence in more than 40 countries, including in the Caribbean.