GraceKennedy hikes profit 78% to $2.7 billion over six months

GraceKennedy hikes profit 78% to $2.7 billion over six months

BY AVIA COLLINDER Business reporter

Tuesday, August 02, 2016

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GraceKennedy Group is reporting revenues of $44.1 billion for the six month period ending June 30, 2016, a 12.3 per cent or $4.8 billion increase over the corresponding period in 2015 when inflows were $39.27 billion.

Net profit increased by $1.2 billion or 78.4 per cent, compared with the corresponding period of 2015, moving from $1.5 billion to $2.7 billion.

Earnings per share for the period were $7.36 compared to $3.75 at June 2015.

Group CEO Don Wehby, in commenting on the results noted that, as reported in the first quarter, a non-recurring gain was realised on the dissolution of some non-operating subsidiaries. Without this gain, the net profit would have increased by 50.5 per cent or $763.8 million "resulting from strong operating performance in the Food Trading, Money Services and Insurance segments".

Wehby noted, "Every business segment showed an increase in revenue. Our foods business segment continues to perform well at home and internationally, and contributed meaningfully to our increase in profitability."

Pre-tax profit for foods improved to $1.03 billion to June 2016 compared to $513.72 million for the six-month period last year.

The segment pulled the lion’s share of revenue over the six-month period, totalling $34.76 billion compared to $31.07 billion in the prior year.

In the coming year, Wehby said the company will continue to invest in expanding channels for US distribution, especially to Hispanic and Caribbean consumers.

Banking and investments performed less favourably for the group, with profit of $180.86 million falling below the $214.81 million earned last year; this despite improved inflows.

Banking and Investment was responsible for $2.78 in revenue, compared to $2.42 billion to June 2015.

Insurance earned $363.13 million in pre-tax profit compared to $191.29 million in 2015. This was based on revenues of $3.08 billion compared to $2.8 billion to June 2015.

Money services continued to be the star performer for GraceKennedy, delivering pre-tax profit of $1.41 billion compared to $1.07 billion the year before. Segment revenue was $3.67 billion compared to the $3.14 billion the year before.

Wehby pointed to the strong performance within the GraceKennedy Financial Group, with Money Services profit up 32 per cent.

The improved performance of the insurance segment, he added, was due mainly to the strong growth in general commission income at Allied Insurance Brokers.

Over the six-month period, total assets for GK improved to $119.7 at June 30, compared to $103.97 billion in the similar period last year, while liabilities climbed to $77 billion, up from $64 billion.

The group improved cash resources to $10 billion, up from $6.9 billion at June 2015.

A dividend of 34 cents per share was declared payable to stockholders on record on September 7, representing approximately $337 million up from $274 million paid in September 2015. The dividends will be paid on September 26, 2016.

The company noted that the planned payout is equivalent to $1.02 per share before adjusting for the three-for-one stock split which will take place on August 11, 2016.

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