Financial Year 2021 saw strong gains in revenues and retained earnings for manufacturing

Jamaican manufacturing company, Jamaican Teas Limited is embarking on an aggressive production development programme, as the management seeks to grow the business while increasing revenue.

The announcement comes as the company reported a positive 2021 financial year with both revenues and retained earnings for manufacturing growing. Managing Director John Mahfood made the announcement of the aggressive production development programme as he addressed shareholders at the company’s 2020 Annual General Meeting (AGM) yesterday.

He told shareholders that come 2022 several new products and designs will be launched to supplement the business.

“We are increasing the production of our dry pot products such as soup and spices; this stand-alone business will operate out of our new facility located near to our factory,” Mahfood said.

He highlighted that “a major challenge during the 2020 financial year was keeping up with the demands of our overseas customers and increasing production. We did a relatively good job in meeting those demands. However, in 2021, the challenge was logistics, getting the raw materials in place so we could produce the products needed”.

Bad second half of 2021

He admitting that the second half of the 2021 financial year was a bad one for the company, as it “suffered badly in terms of stock-outs and lost sales. We are, however getting on top of that situation; hence I expect that in the first quarter of the FY2022, we’ll see an improvement in logistics”.

Mahfood noted that the company’s supermarket arm continues to suffer from a downturn in sales due to curfews and other restrictions.

“However, these restrictions are slowly being rolled back, and if the authorities are able to maintain a low level of infection, I believe we will make our way through 2022, especially with the tourism industry rebounding,” he advised the AGM.

The AGM also got an update on the revenue and retained earnings gain as well as expectation for 2020:

• FY2021 saw strong gains in Revenues and Retained Earnings for manufacturing; however, for FY2022, Jamaica Teas is cautious in it expectations due to supply chain disruptions and supply chain-related inflationary pressures.
• For FY2022, Jamaica Teas expects the cost of raw material and shipping to continue to rise.
• High levels of vaccine hesitancy and slow pace of rollout will have negative impacts on the economies of the Caribbean region.
• Factory expansion remains one of the Company’s key growth projects for FY2022.
• Aggressive Product Development Strategy being embarked on for FY2022.
• Expected decline in revenue for the supermarket business due to reduced customer count as a result of the COVID-19 infection prevention and control measures.
• Sale of Belvedere units to be recorded in FY2022.

Successful bid for the globally coveted Safe Quality Food certification

Chief Financial Officer Cameron Burnet who also addressed the AGM noted that in November 2020, Jamaican Teas was successful in its bid for the globally coveted Safe Quality Food (SQF) certification following its previous HACCP certification in 2018.

This certification positions the company among world-class manufacturers, hence the company will be better able to attract contract manufacturing business from global brands.

For the year ended September 30, 2020, Jamaican Teas revenues grew 70 per cent to reach a total of $2.20 billion (2019: $1.29 billion). The cost of sales went up 68 per cent to reach $1.61 billion.

However, the gross profit margin expanded to 68 per cent from the previous year’s 33 per cent. Profit attributable to shareholders in 2020 closed at $222.40 million in contrast to $395.76 million in 2019.