Grace 3rd quarter profits up on remittances and online sales

BY STEVEN JACKSON Business reporter

Tuesday, November 10, 2015

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THE Grace Kennedy group benefited from a growth in remittances and online sales which increased its profits nearly 7.0 per cent to $878.3 million for the third quarter ending September 2015.

The company explained that its sales on popular US selling platform Amazon grew since its store launch in summer. Grace products were always sold on Amazon by individual traders but now Grace sells directly to customers.

"The group's Grace Jerk Seasoning was recognised as being the 'number 1 new release' in the herbs, spices & seasoning gifts category on the Amazon shopping portal," stated Grace in its financials released this month. "We are delighted by the opportunity to present our Grace products to a wider audience and to provide greater flexibility and convenience in accessing our products worldwide."

Total revenues at the group grew to US$20.4 billion for the quarter compared to $18.4 billion a year earlier, indicating increased growth at Grace.

Grace added that its manufacturing arm was positively impacted by strong demand for products manufactured in Jamaica, efficiency gains from process, as well as yield improvements, and favourable commodity prices, which resulted in higher profits when compared to the prior year.

"Our Hi-Lo stores continue to deliver improved results and the chain's performance continues to be bolstered by our recently renovated stores in Manor Park and Barbican," stated management in the financials. Its Mandeville store, however, closed its doors earlier in the year.

Looking at the nine months of the financial year, the group's performance was in part impacted by the costs associated with the integration of its "expanded US Food operations through GraceKennedy Foods (USA) LLC, recognition of the total asset tax liability in the first quarter, lower foreign exchange gains and higher finance costs". Consequently the company earned less net profit at $2.4 billion compared with $2.7 billion over the nine-month period.

Despite the reduced profit, its money services division earned the highest profit for the group at $1.73 billion followed by its food trading division at $609.5 million, insurance at $470.5 million and banking & investments at $372.7 million.

Shareholders' equity increased by 1.8 per cent over the nine-month period to $37.2 billion, which equates to a book value per share of $112.47. On 5th November 2015 the Board of Directors approved a third interim dividend of 90 cents per stock unit to be paid on 16th December 2015.

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