JFP Limited, a contract manufacturer specialising in custom-designed furniture, is rolling out a transformation plan as mounting losses and declining margins force the 40-year-old manufacturer to rethink its business from the ground up.

Faced with a net loss of $117 million — double that of the previous year — and an 81 per cent collapse in shareholder equity from $133.4 million to $24.8 million, the company has turned to audit, assurance and consulting firm PricewaterhouseCoopers (PwC) to lead a sweeping review aimed at arresting the decline in overall financial performance and repositioning the firm for long-term growth.

Chairman Lisa Bell, in her first full year in the role, framed the financial year not just as a rough patch, but also as an existential inflection point.

“Rather than being solely defined by the difficulties of the past year, this moment is a turning point. We are undertaking a comprehensive and forward-looking strategic review to reposition JFP Ltd for long-term growth and resilience,” Bell said in the company’s just-released 2024 annual report. “At the heart of this effort is our collaboration with PricewaterhouseCoopers (PwC), whose global expertise is helping us surface all the critical internal and external factors that must shape our new strategic approach. Together, we are working to unlock the full potential of our company.”

The review comes at a time when JFP is under pressure from multiple operational and financial setbacks. The company recorded $407.5 million in revenue, down slightly from $411.1 million in the previous year, but the more troubling trend was the sharp contraction in gross profit margin, which fell from 52 per cent to 36 per cent. This deterioration was primarily driven by cost overruns on major projects, which the company attributed to prolonged client approval timelines, late-stage design changes, and inefficient internal workflows. A review of the company’s audited results also showed that cash flow pressures intensified, receivables climbed to $175.5 million, and supplier payables surged by 27 per cent.

To address those concerns, management has begun tightening project terms, embedding penalties for excessive delays, and digitising internal processes to restore control largely through its recently installed software called Solidworks as well as machinery to improve automation in production. Solidworks replaces AutoCAD, and has enhanced the precision of the furniture-making design process, setting the company on a path for improved efficiency as it seeks to land new job contracts.

“We have started the implementation of more robust operational and risk management practices, including ensuring that all projects are undertaken with signed contracts, design approvals and, where necessary, penalties for project delays,” stated CEO Metry Seaga and COO Stephen Sirgany in their joint message to shareholders.

However, JFP’s pivot lies in its evolving business model. The company is now moving to narrow its market focus, concentrating resources on sectors where its value proposition is strongest.

“We undertook a strategic assessment of our market segments to determine where our value proposition was strongest, which is guiding more focused business development efforts,” Bell said.

Within the past year JFP has engaged new clients such as PF Chang, an American-based casual dining restaurant chain that serves Asian fusion cuisine. The company is also working on new and existing contracts across the Caribbean and in Latin America.

JFP does business in Trinidad and Tobago, Barbados, Antigua, Saint Vincent and the Grenadines, St Lucia, Dominica, Bermuda, Panama, and now Guyana through PF Chang. It is also looking to secure new contracts with PF Chang in Jamaica, following its announcement to set up restaurants locally, before heading to Barbados and the Cayman Islands.

JFP offers products made from many varieties of materials, such as wood, metal, solid surface, acrylic, and various types of upholstery. Its manufacturing capabilities include but are not limited to the manufacturing of furniture for offices, hotels, restaurants, laboratories, and schools; point-of-sale items such as gondolas for clients including KFC, Pizza Hut, Digicel, S Hotel Montego Bay, AC Hotel by Marriott, Sangster International Airport, and the Government of Jamaica.

The furniture-making company is also betting heavily on technology and automation to restore healthy profit margins.

Capital investments in a plasma CNC machine — a computer-controlled cutting tool used primarily for slicing through metal materials — and also a pipe bender and edge-banding equipment are expected to lift efficiency and reduce production costs over time. Meanwhile, its manufacturing facility, now largely solar-powered, is being further optimised for energy and material efficiency, the executives said.

To build future capacity the company has also launched a structured internship programme in partnership with the University of Technology, Jamaica (UTech); Caribbean Maritime University (CMU); and HEART/NSTA Trust, with the aim of developing talent in upholstery, and design.

— Karena Bennett