Jamaican Teas boasts export sales of $102m

Jamaican Teas boasts export sales of $102m

BY KARENA BENNETT Business reporter bennettk@jamaicaobserver.com

Wednesday, February 18, 2015

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JAMAICAN Teas' appointment of a new distributor for the north-east US market has resulted in a 91 per cent increase in export sales for its first quarter ending December, financials indicate.

The company boasted export sales of $102.7 million, up from $53.8 million it made a year earlier. The strong increase in export sales led to overall increases in sales, which moved from $274.9 million by $44 million or 16 per cent over a comparable period last year.

Profit grew by 28 per cent to reach $27.5 million from increased revenues of $319 million. However, the tea company reported negative cash flows at the end of the quarter.

"Despite a tight domestic economy, our group completed a successful first quarter to December, driven by strong exports," Chief Executive Officer John Mahfood said in his address to shareholders in the unaudited accounts released last week. "The increase in exports relates mainly to increases in the US market. We appointed a new distributor for the north-east US and expect that this will result in further improvement in sales."

About half of Jamaican Teas' export sales are to the Caribbean market, while the remainder is shipped to North America. The major growth areas are Trinidad and Florida.

"It has always been our strategy to build our export business and therefore diversify our markets and take advantage of greater scope for growth in the overseas markets. Nevertheless, we continue to focus on the domestic market to ensure that we maintain our market share and find ways to improve on it, as well as to add new products where feasible," he added.

Notwithstanding no real estate sales for the current period, Mahfood stated that he expects to see a continuation of positive performance of the company's manufacturing division and sales from its real estate division, going forward.

Jamaican Teas now owns 100 per cent of JRG Shoppers' Delite Limited, having purchased the remaining shares held by the former manager of the company. Sales from the company's two supermarkets in Westmoreland are up nine
per cent compared to
the comparative quarter; however, profits were flat, according to the CEO.

"Our jointly owned Supermarket in Montego Bay showed a reduction in losses," he stated in reference to Bay City Foods Limited.

During the year, Jamaican Teas bought Orchid Estates in St Thomas for $63 million, and is targeting 71 two-bedroom houses and the related infrastructure at the location. The company plans on having 29 units on the market by the end of the first quarter of next year.

"We are nearing completion of phase one of our development in Yallahs, St Thomas. Approximately a half of the units have been sold and we should start delivering to the purchasers in April 2015," Mahfood stated.

H Mahfood and Sons Limited, a subsidiary of the company, should begin construction of the remaining 42 houses in March 2016.

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