Business

Jamaican Teas nets $93-m profit

Wednesday, January 15, 2014    

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JAMAICAN Teas made $93 million net profit for its September year end or one-quarter higher than year earlier levels based on increased revenue streams, audited financials indicate.

The audited results essentially corroborated the unaudited results of $94-million profit over the same period.

The audited profit was earned from a record $1.2 billion in revenues, up 45 per cent year on year.

"For the first time revenues exceeded the $1-billion mark from our manufacturing and retail operations," said John Mahfood, chief executive, in his address to shareholders in the unaudited accounts released previously. "This was achieved against the background of a continuing weakness of the local economy and devaluation of the Jamaican currency."

The sales were bolstered by growth from its Caribbean Dreams teas line and Jamaica Blue water line.

The highlights in the year included the "successful" completion of its first real estate development. Additionally, the company entered into agreement to purchase land for future developments totalling $84 million.

Jamaican Teas also purchased and retrofitted its building at Bell Road, Kingston for its manufacturing, and administrative operations, costing some $106 million. Finally, the company issued corporate bonds which netted J$100 million to fund new real estate development.

The tea maker completed its third year of listing on the Junior Market. Since 2010, it ventured into estate projects, as well as growth in its supermarkets and consumer brands of Tetley Teas, Caribbean Dreams and Jamaica Blue spring water products.

"We expect to build on the foundation we now have in place. New lines were recently added that will positively impact sales and profit in the new fiscal year," said Mahfood. "We expect that our latest real estate development planned for St Thomas will contribute positively to profit during the year. Our expectations are that export sales should continue to perform well and so far the local market seems to have stabilised.

"The performance in the last six months along with new products recently introduced suggest that the results for the 2014 fiscal year should build on that achieved in 2013 barring unforeseen developments."

During the year, Jamaican Teas bought Orchid Estates in St Thomas for $63 million, and aims to have 29 two-bedroom houses on the market by the end of the first quarter of next year. H Mahfood and Sons Limited, a subsidiary of the company, will begin redeveloping those homes in October and begin building another 42 houses in March next year. Earlier this year, H Mahfood & Sons Limited sold all the units of its first real estate project, Carmen's Court.

Billed as charming, contemporary and ideal for property virgins and investors, the gated community on Kingsway offered 18 super studios.

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