Chairman of Consolidated Bakeries (Jamaica) Limited (CBL) Anthony Chang believes that the company's strategies are paying off with the results being a significant increase in revenues and a return to profitability after a reported loss in 2021.
For financial year 2022, Chang pointed out in the directors' report that while the company faced post-pandemic aftershocks that forced a new approach in operating, CBL's strategies "remained rooted in rebranding, reorganising, and restructuring" in an effort to meet the goals of the company in 2023 and 2024.
Among the strategies employed throughout the year were the expansion of distribution through an increased number of vehicles in the company's fleet, the introduction of new snacks and grab-and-go food products to meet growing consumer demands and, according to auditors Bogle and Company, an improvement in the company's cash management policy.
As a result, CBL saw a 26.5 per cent jump in overall sales which totalled $1.37 billion as at December 31, 2022, up from $1.08 billion a year prior. This was partly due to an uptick in export sales, the company's annual report outlined.
"Further enhancing domestic sales growth was our expansion of the small shop program[me], an area we have been working to expand on," it continued.
Gross profit increased by 26 per cent in line with an increase in sales, moving from $425 million in the prior year to $537 million in 2022.
The company, however, saw its expenses significantly increase due to rises in the costs of packaging and raw materials.
Even despite the increases across all expense line items, the company reported a profit from operations of $31.6 million for the year when compared with a loss of $11.22 reported in 2021. After adjusting for interest cost and taxation, the company achieved total comprehensive income of $14.67 million, reversing the 2021 loss of $11.3 million.
Earnings per share was $0.08.
Notwithstanding, the chairman acknowledged that the company still faced other challenges, "particularly with the bread segment of the business", that stymied growth. To this end, the company has invested in technology and new product development to meet the changes in demand and improve its chances of competing in the baked goods market.
"Management has invested over $60 million during the financial year on capital expenditure, plant, machinery, and equipment (45 per cent), improvement to our fleet (44 per cent), office furniture and fixtures (5 per cent) and computer equipment (6 per cent). These investments are critical to achieving a competitive advantage by providing the ability to react quickly to new market trends," Chang shared in the directors' report.
Additionally, the company continued implementing staff reorganisation processes, including training and development, which have contributed to "ongoing improvements in staff performance".
CBL's total assets for the year ended at $1.08 billion with all categories except financial investments showing increases. Cash and cash equivalents grew by almost $10 million to end the year at $71.83 million.
For the current financial year, the company is focused on increasing export sales while driving growth in the local market.
"While we are currently partnered with our overseas distributors who deliver select products for us in the Florida and Canadian markets, based on customer feedback, there is obviously more opportunity in these locations for us to capitalise on," the report stated.
"To this end, we are continuing our investment in marketing and branding. This includes testing new launch campaigns, designing new packaging, and improving the shelf life of products to meet international standards," it added.
CBL will continue to invest in new equipment and adding new delivery routes as it anticipates the roll-out of new products in the fourth quarter of this year.