Caribbean Flavours and Fragrances on track for record-breaking year

Business

Caribbean Flavours and Fragrances on track for record-breaking year

BY DAVID ROSE
Observer business writer

Friday, December 04, 2020

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With less than a month to go until their financial year (FY) comes to a close, Caribbean Flavours and Fragrances (CFF) is on track to record its best performance in its 19-year history.

Although COVID-19 has negatively impacted most companies in Jamaica, CFF has benefited from the current environment thanks to the company's quick action to pivot and provide alcohol solutions for sanitisation process.

CFF has built up new business customers who have requested their products, thereby placing these products in high demand.

These measures saw CFF beating their 2019 FY net profit in just six months with their overall nine months revenue just $11 million shy of the prior year's $462.2 million. The total assets also stood nine per cent higher at $613.5 million with shareholders equity growing to $466.7 million at the end of September.

“We are a manufacturing business and we are going to expand into agribusiness. One of the things we've been doing is looking at how to extend the fragrances and flavours business using agricultural products. We've employed the Scientific Research Council to do the scientific examination of certain products that we're looking to expanding into. We're committed to using science to determine how we go to market and what kind of products we build,” said Carlton Samuels at CFF's most recent annual general meeting (AGM) on their venture into new flavours using local products.

“Sorrel has traditionally been a seasonal product and that has affected production consistency. We think we've managed to find a solution for that and to keep the product on the market consistently. We are also looking at other product lines again involving locally produced or locally grown crops, one of which is ginger. Those are some of the pillars of the new thrust that we're going forward with. We will continue with our traditional lines and our traditional supplies to the traditional market. The world is looking for more organic and natural high flavour profile products and that's where we want to go,” said CFF's Chairman Howard Mitchell on the company's most recent sorrel flavouring product.

Despite these improved results, CFF's stock price has only gained some recent activity spurred on by the stock split which occurred in early October. The CFF board saw the 10 to 1 split as a measure to improve liquidity and expand the shareholder base which was constrained by the fact that 90.55 per cent of the shares were held by the top 10 shareholders. CFF's stock price rose to a peak of $3 post-split ($30 pre-split) on greater volumes compared to the $1.50 ($15 per split) at the end of 2019 which hardly traded.

The reduced sugar product had a lower uptake which was affected by the coronavirus pandemic with the closure of schools, which was where the expected demand should have come from. This even led the firm to write down some inventory, according to board member Ian Kelly, during the period. In spite of these events, CFF remains confident about their ability to grow their clientele with the research and development expenditure paying off now.


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