Supermarket brews up first profit

Wednesday, February 01, 2012

Jamaica Teas has recovered its initial investment in its Kingston-based supermarket in less than 18 months, according to its latest annual report.

"We are pleased that the amount invested in the Kingston supermarket in 2010 has been fully recovered during the fiscal year," said the report on the performance in its financial year ended September 30, 2011.

In early 2010, Jamaican Teas spent approximately $9 million refurbishing the store located on Chancery Street in Kingston, before opening and rebranding it JRG Shoppers Delite Supermarket in March of that year.

The store started to make a monthly profit in July 2010, but incurred a small operating loss for the six months to September 2010, over which period it recorded $85.3 million in sales.

During the last financial year, its sales showed consistent growth and came in at $239.9 million, even though Jamaica Teas did not disclose the profit margin.

In December, the tea manufacturer and retail operator entered into an agreement to purchase the real estate and supermarket equipment at the location for $58 million, of which $42 million is being financed by a vendor's mortgage "at a competitive interest rate".

Last year, Jamaica Teas also bought a 49 per cent stake in Bay City Foods Ltd, operator of a supermarket in Montego Bay, for $33 million.

"We recorded a loss of $11.6 million after tax, as our share of the investment during the year," said the annual report. "We expect to see a significant turnaround in results in 2012, as sales continue to improve in line with expectations."

In the last financial year, the two supermarkets contributed 37 per cent of the Jamaica Teas' external revenue of $645.7 million.