Revenue up, but COVID-19 delivers punch to Mailpac profits

Business

Revenue up, but COVID-19 delivers punch to Mailpac profits

BY ABBION ROBINSON
Business reporter
robinsona@jamaicaobserver.com

Wednesday, August 12, 2020

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MAILPAC Group Limited (MGL) posted on Monday its record revenue of $366.1 million for its second quarter ended June 30, 2020. This represents a $1.4-million increase over the previous quarter ended March 31.

It should be noted that MGL started trading on October 1, 2019. Accordingly, the financial statements have no comparative period for 2019.

“Despite the second quarter traditionally being the slowest in online retail, coupled with the meaningful decline in international shopping in April due to the impact of COVID-19, the company achieved its highest-ever quarterly revenue. We are encouraged by the performance of the company in its second quarter as we navigated through the adverse impact of COVID-19 on our international shopping business,” stated Executive Chairman Khary Robinson in the company's unaudited report.

According to him, despite a short-term decline in the international business, the local business saw a bump as consumers used MGL's platform to acquire essential items, such as household and office supplies, in the midst of limitations on movement and social interaction.

Robinson further added that the amalgamation of both business lines, Mailpac Services and Mailpac Local, have continued to generate meaningful momentum and operating efficiencies for MGL.

The Mailpac Group, with 11 locations islandwide, facilitates online shopping and shipment to Jamaica by offering clients a US shipping/mailing address.

For the quarter under review, MGL achieved an after-tax profit of $87.8 million. This however represented a 13.8 per cent decline over the previous quarter.

Operating expenses totalled $68.6 million, down from the previous quarter primarily due to COVID-19-related reductions in staff costs, advertising expenses, and store operating expenses.

Robinson further indicated that while the sustained impact of COVID-19 has led to significant uncertainty in the consumer space, MGL is actively pursuing strategic initiatives to serve a broader base of customers.

Total assets at the end of the quarter under review stood at $616.2 million, while shareholders' equity stood at $543.4 million.

MGL became publicly listed on the Junior Market of the Jamaica Stock Exchange on December 4, 2019, and through its IPO of shares on the Junior Market has managed to raise $495 million – a record-breaking total, creating a first in the history of the Junior Market.


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