Food and distribution company Derrimon Trading Limited has reported continued growth across business segments. The company now looks forward to its expansion plans despite the diminishing effects of the COVID-19 pandemic.

Speaking at the company’s annual general meeting last Friday, Derrick Cotterell, chairman and chief executive officer (CEO), said that the business was able to withstand the impacts of the pandemic due to strategic leadership, quick response, a dedicated team and improved operational efficiencies, all carried forward from a successful 2019 year.

“The growth of the company’s financial metrics is as a result of a continuation of our strategic approach in 2019, to maximise revenues while growing market share and profitability. The overall performance is evidence that the team has maintained its focus on the implementation of strategies that continued to add to shareholders’ value, even in the highly competitive environment,” he said in the company’s annual report to shareholders.

“We remain cognisant of the impact that the COVID-19 pandemic will have on the world and our local economy. COVID-19 seems to be a long-term issue, but despite the associated challenges, Derrimon and its subsidiary companies remain focused on growth and delivering the best possible outcome to stakeholders,” he continued.

Cotterell further noted the company’s move into its 105,000 square feet warehouse space at Tom Cringle Drive in the Ferry area off Mandela Highway in St Catherine, which he said would further help with strengthening efficiencies as the business seeks to expand and deepen its island-wide footprints in its distribution and retail store management. During the pandemic the company was also able to significantly increase its distribution footprint through its ecommerce platform and grocery segment led by its Sampars Cash and Carry and Select Grocers chains. It also managed to retain the full complement of staff and even add new members to the team.

For the financial year ended December 31, 2019, the group saw revenues amounting to $12.6 billion up from $9.3 billion in the previous year and after-tax net profits of $302 million.

Ian Kelly, chief financial officer (CFO), in commenting on the company’s financial performance, said that the first quarter of this year also started on a good footing despite a slight tempering of revenues in the second quarter when the effects of the pandemic began to take effect.

He, however, said that the strategies employed by the group allowed the company to stabilise revenues in order to continue in its growth mode agenda.

“Whilst revenue was not growing at the level that we had projected in the second quarter, we did enough to ensure that our gross profit grew and at a faster rate than the previous quarter. We are happy that we were proactive with our logistics and how we buy, that the relationships with suppliers remained strong and firm and that we acquired foreign exchange that was necessary to make payment to suppliers. Our warehouses were also robust in delivering what was required for customers and the collection strategy with our customers was very tight allowing us the ability to go back to market and reduce interest expenses associated with our operations,” he said in outlining the strategies.

“Whilst COVID is here we are encouraged that out gross profit continues to grow and that as a company we have taken the stance to not lay off staff but instead had [engaged] different ways of mitigating risk in the pandemic environment and will ensure that the financial returns of the company remains stable and growth in the expected areas of gross and net profits are maintained and cost contained,” he said.

For the six months ended June 30, 2020, Derrimon Trading reported revenues of $6.3 billion, up to $16.11 million more than the $6.29 billion of the same period last year and net profits of $183.9 million for its consolidated operations. These were attributed to growth in the company’s retail segments along with that from Caribbean Flavours and Fragrances Limited in which it has a stake. Its Woodcats International subsidiary, however, saw a reduction over the period, but the company expressed confidence in a rebound after some segments of the manufacturing sector reopened in July.

Shareholders give APO greenlight

Following on a recent approval by its board of directors, a resolution to allow the company to issue 1,800,000,000 ordinary shares was also unanimously passed by shareholders present at the meeting. The company said that the proceeds from this additional public offering (APO) of shares was to be used in helping the company to offset its expansion plans.

“We have some expansions, some acquisitions that we want to do, some as early as this year and some early next year. We want to further grow the business, we see some opportunities that are right at our doorsteps,” the chairman and CEO said also noting that a prospectus outlining the full intentions of the company will be filed with the Jamaica Stock Exchange (JSE) over the next few days.