Seprod increased dividend payout from equity portfolio sale

Business reporter

Wednesday, May 10, 2017

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P B Scott, chairman of manufacturing company Seprod Ltd, disclosed this week that it was the sale of the company's equity portfolio in 2016 which allowed the upsizing of dividends to shareholders during the year ended.While earnings per share improved from $1.68 to $2.11, the company paid $3.23 per unit in dividends, up from $0.95 in 2015.

Scott said in the company's annual report, released this week, “We decided to return this capital from the gain to the shareholders, resulting in an additional $2.28 in dividends, in excess of the $0.97 we had planned for the year.”

The chairman said he believed that earnings per share growth for Seprod were sustainable, and added: “We expect to continue this in 2017,” noting that Seprod has increased its dividend annually for 10 years. “On a normalised basis, we expect this to continue in line with the growth in earnings,” Scott said.

Headquartered in Kingston, Seprod includes subsidiaries Belvedere Ltd — engaged in agriculture; Caribbean Products Company Ltd — engaged in the production and sale of oils and fats; Golden Grove Sugar Company Ltd and its subsidiary — engaged in sugar production; investment company Golden Grove Funding Ltd; consumer products company Industrial Sales Ltd; and International Biscuits Ltd — engaged in the manufacture and sale of biscuit products.

Other subsidiaries are: Serge Island Dairies Ltd, which makes and sells milk products and juices; Serge Island Farms Ltd — engaged in dairy farming; Jamaica Edible Oils and Fats Company Ltd and joint venture Jamaica Grain and Cereals Ltd, which manufactures and sells corn products and cereals.

In 2016, the company saw a $2-billion or 15 per cent rise in revenue to $15.7 billion at year end with operating profit of $1.6 billion, an increase of 76 per cent over 2015.

Net profit after taxation increased by 51 per cent to $875 million.

CEO Richard Pandohie noted in the annual report that the company spent more than $700 million during the year to upgrade its factories and invest in an irrigation system at the dairy farms, bringing the total capital expenditure over the last two years to more than $1.4 billion.

“The investments,” he said, “have set a solid platform for us to drive productivity, improve our capability to deliver exciting new products to our consumers, and create a stimulating work environment for our employees.”

In 2017, he outlined in the report that the company would be seeking to partner with dairy farmers to increase milk production; with other objectives being to achieve break-even in the sugar operations.

Seprod will also be seeking acquisition opportunities and partnerships. In addition, the company aims to drive export growth, Pandohie stated.

Scott noted that for many years companies outside of the financial sector in Jamaica were hampered by low consumption in the economy and very high energy costs. “Energy costs fell last year, and with that we believe consumption and growth in the economy will follow,” he said.

He noted that while there are challenges in the wider Caribbean region, “We see a lot of opportunities that we hope to develop in the future.”




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