Derrimon triples earnings, adds Blue Power, Delect to product list
DERRIMON Trading posted $49.9 million in net profit, more than tripling its bottom line.
The distribution and wholesale company, which last week posted the significant increase in earnings for the year ended December 31, 2013, netted $15.7 million the year before.
It said that revenue and gross profit margins grew as a result of new product offerings, better margin management and improved sales execution, despite a challenging economy.
More specifically, it became the distributor for soap manufacturer Blue Power, as well as added canned mackerels from Delite to its portfolio, said Derrick Cotterell, chairman and CEO of the company.
"Our latest acquisition, Sampars Cash and Carry in Mandeville boosted sales and we also had an increase in activities on our website," he said.
The company has had a history of growth, seeing double-digit growth over the last eight years.
Revenue grew by 10 per cent, up from $4.7 billion during the year ended December 2012, to $5.2 billion last year.
Both the wholesale and distribution of lines of the company fared well, with the distributing arm contributing $3.5 billion to total sales, up from $3.3 billion, while its wholesale division, Sampars making $1.6 billion in sales, up from $1.4 billion.
The company also provides complementary logistics support, warehouse and storage rental as well as cold storage facilities.
Interest income for the year ended December 2013 was $1.6 million, up from $507,000 year over year, while storage space rental moved to $37.6 million during the period under review, up from $35 million.
The distributor, which also operates four Sampars Cash 'N' Carry stores -- Washington Boulevard, Marcus Garvey Drive and downtown Kingston, successfully raised $150 million following an initial public offering (IPO) last year.
Proceeds of the IPO would expand its network of outlets, retire debt, upgrade software, and provide working capital.
Already, it has begun upgrading its point-of-sale software,which also includes a customer relationship management system that will help the company know its customers in order to meet their needs.
Cash has also gone to developing its e-commerce portal as well as retire some debt.
Derrimon Trading hopes to ramp up its e-commerce portal and allow members of the diaspora to order online and have goods delivered to their homes and businesses in Jamaica.
"Part of the expansion is to market that aspect of the business whereby we can earn foreign exchange," said Cotterell.
Currently, local customers use the system to order Sampars' goods and have them delivered anywhere in Jamaica.
Derrimon's operating expenses totalled $499.5 million during the period under review, 25 per cent higher than the comparative period in the prior year. It pumped more into administrative expenses, as a result of adding the Mandeville outlet as well as putting contract workers permanently on staff.
"We had part-time workers and we hired them full-time to enhance customer relationship," said Ian Kelly, director of finance. "But we also want to give them stabilty and have them grow with the company that they have contributed to."
Sampars Cash and Carry, which it acquired four years ago, sells a range of bulk items that include dried products, such as rice and sugar as well as some meats.
The company plans to increase its number of Sampars Cash and Carry wholesale store outlets to as much as seven in five years.
Kelly said that the firm is looking to increase the footprint of its wholesale store subsidiary as part of a five-year plan.
Derrimon operates primarily from its facility located on Marcus Garvey Drive. However, its distribution network extends islandwide. Its warehouse facility of approximately 100,000 square feet sits on 3.5 acres of land and is less than two miles from the Port of Kingston.