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However, company still in the red for the half-year period

Durrant Pate/Contributor

Air conditioning and energy company, CAC2000, has returned to profitability in the second quarter ended April 30, 2026, recording a meagre net profit of $3.7 million that reflects the early results of management’s shift toward a more disciplined, cash-focused operating model.

Alongside positive operating cash flow of $43.8 million for the half-year, the second quarter performance represents a positive shift in operating performance driven by improved margins and disciplined cash management. However, over the longer-term half-year period, CAC 2000 recorded a net loss of $69.8 million, up from $56.1 million posted a year ago on revenue of $226.1 million, reflecting a 47.9% decline.

The management blames this slide in fortunes on the prevailing market conditions, whilst highlighting its continued focus on credit quality and cash-generating activity. The return to profitability for Q2 was driven by improved margins and disciplined cash management.

In the meantime, the Board and management remain focused on three near-term priorities: accelerating receivables collections, sustaining margin discipline, and managing the company’s debt obligations in conjunction with its lending partners.

Financial highlights 

Revenue for the half-year declined 47.9% to $226.1 million. CAC 2000’s gross profit margin improved significantly to 41.7% from 34.0% in the comparable period, reflecting a more favourable revenue mix and improved cost discipline. The second quarter (January–April 2026) recorded revenue of $144.6 million and a gross profit margin of 48.0%, demonstrating improving operational momentum.

General and administrative expenses reduced to $139.9 million, a decline of $26.9 million or 16.2%. Selling and distribution expenses fell 86.5% to $1.5 million, reflecting structural changes in the company’s distribution approach.

Operating cash flow improved substantially to a positive $43.8 million (H1 FY2025: outflow of $16.4 million). This reflects disciplined working capital management, including a reduction in trade receivables and improved payables management. 

Cash and cash equivalents at April 30, 2026, were $49.3 million (October 31, 2025: $46.2 million).

Finance Costs & Borrowings

Net finance cost of $22.9 million remained the primary driver of the net loss. Total borrowings stand at $447.3 million. The company continues to work with its banking partners regarding covenant arrangements. Management reports that waiver letters from BNS Investment are in place through October 31, 2026. 

A significant portion of the company’s trade receivables relates to long-outstanding balances, including amounts due from Government of Jamaica entities, which continue to constrain short-term liquidity. To this end, the management has implemented an active collections programme and is engaged in ongoing discussions with its lenders to align debt servicing with current cash generation. 

The Board considers the acceleration of collections a key priority for the second half of the financial year. Total assets at April 30, 2026, were $1.15 billion (October 31, 2025: $1.20 billion). 

Inventories of $449.2 million and trade receivables of $495.5 million represent the principal asset categories. Shareholders’ equity declined to $118.5 million from $188.6 million at October 31, 2025, reflecting the net loss for the period.

With CAC2000’s second five-year period of 50% remission as a Junior Market company having expired on January 7, 2026, the company is now subject to the full statutory corporate income tax rate of 25%, effective January 8, 2026. No income tax expense was recorded for the current period as no taxable income arose.

No dividend has been declared for the April quarter.