Express Catering expecting big buzz from new Starbucks locations

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Friday, June 15, 2018

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Express Catering Limited (ECL) directors recently declared an interim dividend payment of US 0.36645 cents (US$0.0036645) per share for a total of US$6,001,437.50 to all shareholders on record as at June 15, 2018.

The interim dividend is payable on September 25, this year, and the ex-dividend date was yesterday.

The announcement, which was made public by the Jamaica Stock Exchange (JSE), recently, followed a meeting of the directors to consider an interim dividend proposal on June 1.

One of Express Caterers' big plans for this year, the opening of its new Starbucks locations, was primarily responsible for its fixed assets expenditure for the half-year of US$198,416. The money was spent on setting up the new locations, as well as on replacement costs for fully depreciated and worn fixtures and equipment.

In terms of future growth, the company says that the addition of the Starbucks Coffee concept to the offerings at the Sangster International Airport in Montego Bay should be completed during the third quarter of the current year.

Work is in progress on this initiative and will see three locations added within the airport, and the company expects substantial revenues from the addition of the three new locations.

“It's a powerful brand, and we anticipate that it will be quite attractive to our customers and that it will be profitable,” Express Catering CEO Ian Dear says.

The Sangster shops are among the 15 Starbucks Coffee shops which they are to operate in Jamaica over the next five years.

One located in the Hip Strip strip in Montego Bay is operated by Caribbean Coffee Baristas, a joint venture between Dear, who is also the CEO of the Margaritaville Caribbean Group, and Adam Stewart, the deputy chairman and Chief Executive Officer of Sandals Resorts International.

Express Catering will operate Starbucks Coffee within the airport, while the other locations will be operated by Caribbean Coffee Baristas.

In terms of future growth, Express Caterers said in its report that the addition of the Starbucks Coffee concept to the offerings at the Sangster International should be completed during the third quarter of the current year.

In its second quarter 2018 interim report to shareholders, the company announced that it had recorded US$3.06 million in revenue for the quarter, compared to US$2.5 5 million in the previous year's quarter, a more than 20 per cent improvement for the period.

Net profit for the quarter was US$544,673, compared to US$37,093 for the same quarter in the previous year. Shareholders earned 0.033 US cents per share during the quarter, compared to 0.002 US cents in the previous year's quarter.

The second quarter is traditionally the lowest-earning quarter for the fiscal year and the company said that, based on the trajectory, it is encouraged by the earning prospects for the full year.

Revenue for the six months to November 2017 was US$6.88 million, compared to US$6.02 million for the previous six months.

This produced net profits of US$1.38 million for the half-year compared to the US$389,722 of the previous six months. Shareholders earned 0.084 US cents for the half-year, compared to 0.024 US for the same period of the previous year.

Fixed assets expenditure for the half-year to then was US$198,416.

The company declared an interim dividend of US$1.5 million in October last year to all shareholders on record at August 14, 2017.

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