Everything Fresh eyeing Caribbean hotels post-IPO

Observer writer

Friday, May 11, 2018

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Food distribution company Everything Fresh Ltd aims to raise $390 million in capital from an initial public offering (IPO) of 156 million ordinary shares on the Jamaica Stock Exchange's Junior Market.

At $2.50 per unit, the company will float 26.3 million shares to the general public when the IPO opens on May 17.

The remaining shares, totalling 129.7 million, will be allocated to Everything Fresh employees (three million), key partners and associates (17.2 million), brokerage firm Stocks & Securities Ltd (SSL) (78 million), and SSL partners and clients (31.5 million).

The IPO is scheduled to close on May 24.

According to the company's prospectus, it plans to the use proceeds raised “to provide working capital to support its operation” to expand its market share and, as result, increase sales and revenue.

“With increased stock levels come the attendant need for larger warehousing facilities and the building out or purchasing of further freezers and chillers to store stock, as well as the expansion of the company's distribution fleet,” the prospectus reads, adding that Everything Fresh intends to instal solar panels to reduce energy cost and thereby improve profitability.

“Finally, the company also sees the opportunity to expand its footprint to other Caribbean countries outside of Jamaica,” the prospectus continues.

Expenses related to the IPO, are estimated to not surpass $20 million.

Everything Fresh currently supplies produce, dairy, seafood, and meat to hotels in Jamaica, among them Riu, Secrets, Bahia, Royalton, Couples, and Jewel Resorts.

With these already established partnerships, and with tourists arrivals and related foreign exchange earnings in Jamaica and across the wider Caribbean on the rise, the company is hoping to tap into available revenue streams by securing distribution contracts with hotel franchises across the region.

“Due to our commitment to maintaining standards of high quality, we keep getting customer referrals,” Everything Fresh Managing Director Courtney Pullen is quoted in a release.

The company is also looking to increase new product lines.

Incorporated in 2003, Everything Fresh began operation in 2008 focusing on local farm produce. It soon ventured into importing fruits and vegetables from overseas and later, in 2012, the distribution of imported meat.

According to the company's financials, revenue rose by almost 15 per cent, from $1.58 billion in 2016 to $1.81 billion in 2017. Notwithstanding, operating costs for 2017 were $185.3 million compared to $154.9 million in 2018, representing a 20 per cent increase — a possible reason for a decline in total profits from $39.3 million to $37.3 million.

Total assets increased from $32.3 million in 2017 to $30.3 million in 2018.

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