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Financial News

Aug 2014 Financial News

GraceKennedy revenues up $4.5b

Aug 04, 2014

The GraceKennedy Group has achieved revenues of $37.2 billion for the six months to June 30, 2014, a 13.9 per cent or $4.5 billion increase over the corresponding period in 2013, Chief Executive Officer Don Wehby said.

During the review period, net profit attributable to shareholders increased by $286.3 million or 20.6 per cent from $1.39 billion to $1.67 billion, the company said in a release.

An interim dividend of $0.78 per stock unit will be paid on September 30, up from $0.70 earlier this year, the release quoted Group Chief Financial Officer Frank James as saying.

Wehby said the sale of the Group's equity interest in First Global Financial Services (FGFS) led to a decline in the company's asset base. However, he noted that the $3.05 billion earned from the divestment would allow the Group to reallocate capital primarily to its banking business and regional expansion of its financial services.

In April, the Financial Gleaner reported that Proven Investments Limited acquired 100 per cent of the shares in GraceKennedy's investment subsidiary, FGFS, from First Global Holdings Limited.

For the six months to June, the release said, GK Foods Division recorded strong revenue growth, driven particularly by international growth in the United Kingdom and United States markets.

It said the foundation for further growth in the US was laid on July 18, 2014 with the acquisition of the assets and brands of USA food business, La Fe Foods Inc. The acquisition was executed through GK's wholly-owned subsidiary, GraceKennedy Foods (USA) LLC.

GraceKennedy said the Foods Division also made another significant step toward further growth by exporting pepper mash produced at its Grace Agro processing plant in Hounslow, St Elizabeth.

While GK Foods' market in Jamaica also experienced revenue growth, profits were impacted by the depreciation of the Jamaican dollar and its impact on operating costs, which resulted in lower margins, the company said.

The Financial Services Division recorded mixed results during the period. The money services segment recorded strong growth in revenue and profits, primarily attributable to its Jamaican and Guyanese operations.

The insurance segment showed good recovery, demonstrated by an increase in profits, attributable to improved underwriting performance and the absence of extraordinary claims losses experienced in 2013.

While the banking and investments segment saw a decline in profits, there was strong deposit growth in GraceKennedy's commercial bank, First Global, which the Group CEO described as "encouraging."

 

Source:
business@gleanerjm.com
Jamaica Gleaner
Sunday August 3, 2014

http://jamaica-gleaner.com/gleaner/20140803/business/business5.html