Two weeks delay in Caribbean Flavours stock split

Two weeks delay in Caribbean Flavours stock split

New date for 10 to 1 stock split is October 13

BY DURRANT PATE
Observer Business Writer

Friday, October 09, 2020

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Listed manufacturing company, Caribbean Flavours and Fragrances 10 to 1 stock split has been pushed back by two weeks to October 13.

The stock split was initially announced for October 1, and would have been preceded by the company's annual general meeting (AGM), which was initially scheduled for Friday, September 25, 2020 at The Knutsford Court Hotel. However, the AGM only took place on Wednesday last at which time shareholders approved two resolutions paving the way for the 10 to 1 stock split.

The first resolution authorises that the company's share capital be increased from 91.45 million shares to 2.6 billion shares by the creation of an additional 2.6 billion ordinary shares. The second resolution approved by shareholders mandates that each of the issued ordinary shares in the capital of the company be subdivided into 10 ordinary shares with effect from the close of business on October 13, 2020.

DETAILS OF STOCK SPLIT

This will result in the total issued share capital of Caribbean Flavours and Fragrances being increased from 89.9 million ordinary shares of no par value to 899.2 million ordinary shares of no par value. A stock split is a corporate action by a company's board of directors that increases the number of outstanding shares, which is executed by dividing each share into multiple ones—diminishing its stock price.

Caribbean Flavours and Fragrances, which began operating in 2001 and became listed on the Jamaica Stock Exchange (JSE) in 2013 provides flavours and fragrances of the highest quality to the major beverage manufacturers in Jamaica. In addition, the company, which is a subsidiary of the Derrimon Group of Companies, exports flavours and fragrances to the Caribbean region and Canada, and also provides fragrances to local manufacturers of household and personal care products.

JUST RELEASED 2019 ANNUAL REPORT

In its 2019 annual report, which was released last month, Caribbean Flavours and Fragrances reported a net profit after tax of $31.50 million, a reduction of $84.38 million when compared to the $115.881 reported for the previous 18-month period ended December 2018. In his message accompanying the annual report, company Chairman, Howard Mitchell emphasised that, “Unfortunately, many of the revenue projects that the company invested in during the year did not produce the expected return in the same period.”

He said, “There was high expectation that the FlavourFit sugar reduction solution would positively influence both revenue and profitability, but this did not materialise. We are encouraged by the approach that is now being taken by the Government in its stance of sugar levels in beverages and are confident that there will be wholesale acceptance of this product by the full manufacturing industry in the near future.”

Mitchell indicated that the decreased profitability was impacted by the increases in the expenses directly related to projects undertaken in order to prepare the company for future business opportunities and costs associated with the Safe Quality Foods Certification but stressed that the revenue and net profit generated were driven by the efforts of the management team through the execution of the annual operational plan, which was approved and monitored by the board of directors.


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