Beverage manufacturer Salada Foods Limited is reviewing its dividend policy as it seeks to balance shareholder value with investment in its operations and market expansion activities.

The issue of dividend payment was laid on the floor at the company’s annual general meeting last Wednesday by shareholders who pointed out that while there was an increase in staff and administrative costs, there was no indication of plans to pay dividends in the current financial year.

Salada paid out $0.06 cents per stock in the first quarter of financial year (FY) 2022/23 and another $0.057 per stock in the fourth quarter. Dividend payment for the year totalled $121.5 million — or a 6.3 per cent increase over the prior year ($114.3 million).

Last Wednesday, the Salada board put a vote for a motion proposing “to ratify and declare dividends paid on December 16, 2022, and July 26, 2023, as final for the year ended 30th September 2023”. The motion was carried.

Responding to the query, Salada Chairman Patrick Williams noted that the manufacturer in recent years have moved from paying no dividend to its shareholders to increasing the share of profit allocation in the last financial year.

“You can’t just leave the company bare…There has to be quality [investment] to expand our product base, to expand our footprint,” he told shareholders, pointing to the company’s recent shipment to Trinidad and Tobago which required some spending.

In fact, Salada’s annual report for 2023 highlighted that an 17.9 per cent increase in selling and administrative expenses were “primarily driven by increased staffing costs and our forward investment into brand awareness and consumer engagement activities in these Caricom markets for long-term market sustainability”.

Speaking to Jamaica Observer following the meeting, General Manager Tamii Brown explained further that during FY 2023/23 the company had invested in upskilling and adding new talent to the company.

“We increased the number of cuppers and have more trained and certified cuppers at Salada We also invested in our technical side, in terms of additional engineers to our team,” she said, adding that inflation also played a role in pushing up staff costs.

Brown also shared that Salada is also mulling investments in the manufacturing plant.

“We’re looking at the repurposing of our plant. We have a six-year-old plant that has served us well and we are grateful for it, but it now needs to be repurposed as we go along for more automation and opportunities for efficiencies,” she explained.

So far, the beverage producer has upgraded its fire alarm and safety system. Salada also purchased a spray dryer and image printer which should be fully commissioned in the current financial year.

“We expanded our packaging line to [produce] more sachet-type products; that’s the single-serve packing that most of our consumers enjoy. Each of our sachets have individual barcodes which allows for sale. So we’ve expanded that line,” Brown added.

For FY2022/23 the company earned $1.4 billion in revenue, a 4.8 increase over the previous year. Net profit improved 2.4 per cent. Total assets stood at $1.34 billion or 1 per cent less than in the year prior.