FOLLOWING its listing on the Jamaica Stock Exchange (JSE) on January 14, Spur Tree Spices Jamaica Limited was able to grow its consolidated revenue by 41 per cent to $237.13 million and its consolidated net profit by 194 per cent from $17.30 million to $50.81 million for the first quarter ending March 31, 2022.
This included the contribution of its recently acquired subsidiary Exotic Products Jamaica Limited which generated $2.18 million in external revenues and $1.17 million in segment profits. Spur Tree’s gross profit improved by 76 per cent to $89.04 million with the gross margin rising from 30 to 38 per cent.
“Despite the significant cost challenges being faced due to the ongoing supply chain issues, the company continues to work assiduously at growing efficiencies in all areas of the business. We continue to capitalise on the economies of scale provided by the growth in our top line in leveraging better input costs. The directors are pleased with the results for the first quarter and are proud of the commitment and outstanding work of the executive team and staff as we strive for continued growth in all segments of the business,” stated the quarterly report which was signed by Chairman Metry Seaga and Chief Executive Officer Albert Bailey.
The company’s total expenses rose by 38 per cent to $37.68 million as it consolidated Exotic Products and the residual listing costs in the offer. After accounting for reduced finance costs due to a reduced loan balance, Spur Tree’s profit before taxation grew by 128 per cent to $51.01 million.
“We have also begun work to expand our footprint in the local market with special emphasis on the food service segment. As we look forward in the coming months, we will continue to prioritise this initiative, not only as an important element of our revenue growth strategy, but also as a part of our risk mitigation approach in building more diverse revenue streams,” the report noted about its intentions going forward.
Spur Tree intends to expand the manufacturing capacity of both companies and introduce new products which will facilitate the transition from being a spices and sauce provider to a full-blown food company. This is aligned with its revenue diversification strategy, which includes expanding its footprint in the local market through the food service segment.
The company’s total assets grew by 98 per cent to $766.91 million, which was funded through the $309.82 million proceeds of the initial public offering and conversion of debt from GK Investments Limited to shares. Total liabilities were cut in half to $95.02 million, while shareholders equity grew by 236 per cent to $671.89 million.
Its stock price rallied to a new all-time high of $4.50 on Monday with more than $41.9 million traded during the day. It closed at $4.12 on Thursday which gave it a market capitalisation of $6.90 billion.
Exotic Products contributed $3.29 million in revenue to Spur Tree’s consolidated revenue in the fourth quarter while earning $7.33 million in net profit. Spur Tree’s revenue rose 23 per cent in 2021 to $859.72 million while net profit increased by 31 per cent to $91.32 million.
“We are cognisant of the current economic challenges, with inflation at record levels in our main market, the United States, and the uncertainty that this creates. However, we remain confident that the work being done in the market with various stakeholders will put us in a great position to continue our current growth trajectory,” the report closed.