Relatively flat performance for first half of 2022-2023 financial year

Durrant Pate/Contributor

Jamaican cigarette marketer, Carreras Limited has initiated an investment drive for its 2022-2023 financial year to plough back lost ground in the trade while building out its brands in the marketplace.

This was disclosed by Raoul Glynn, the recently departed managing director in his final report to shareholders.

Glynn advised that the “Financial Year 2022/23 will be a year of broad investment within the company as we seek to revitalise our core brands and maximise on the opportunities presented to engage. This investment will enable Carreras Limited to deliver more sustained results into the future”.

He promised shareholders that the company would continue to invest in its core brands, Craven A and Matterhorn, as Carreras is aiming to exceed the expectation of its stakeholders.

According to Glynn, who has taken up a new post at Carreras parent company, British American Tobacco group, “this investment in our consumers has borne fruit driven by the level of revenue increases which have been realised in the first half of the year, and this is expected to continue throughout the financial year.”

During the first half of the year operating revenues were flat at J$7.53 billion, a mere five per cent growth when compared to the same prior in 2021. This relative growth was mainly attributable to the increase in volumes achieved over the period as well as improvements in the portfolio mix.

Operational costs rising

Profit before income tax came out at J$2.18 billion, which is 14 per cent or J$358 million lower than 2021. Operational costs totaled J$1.31 billion, which is a 31 per cent increase compared to the corresponding period in 2021. This increase in operational costs is driven by the rising cost of inputs such as, electricity, fuel and maintenance.

Despite these external challenges, Carreras persisted in its investment in core business during the second quarter, as the management believes this investment will lead to stronger performances in the coming periods and propel us to sustained growth and delivery in all key performance indicators. Net profit for the September quarter closed at J$1.63 billion while the earnings per stock was 33.5 cents compared to 39.2 cents for the comparable period in 2021.

The board of directors has approved an ordinary interim dividend payment of 19 cents per stock unit, totaling J$922.3 million. This will be paid out of accumulated profits on December 14, 2022 to stockholders as shown on the Register of Members as of November 25, 2022.

This is in keeping with Carreras’ dividend policy and demonstrates the company’s continued commitment to enhancing shareholder value.

Illicit trade remains major problem

The illicit trade continues to permeate the Jamaican cigarette trading environment with Carreras employing additional strategic initiatives to counter the effects from these activities. A multi-industry approach to tackle the illicit trade have been adopted by the company.

This approach seeks to drive awareness, advocate for stricter border controls and legislative changes for imposition of stricter penalties and sanctions. Carreras’ management is commending the efforts and support of Jamaica Customs Agency and the police force, specifically the Counterterrorism and Organized Crime Investigation Branch (C-TOC) for their fight against the illicit trade.

“We are working hard alongside other stakeholders of the industry, to ensure that future tobacco regulations are balanced, practical, and fair. We are also committed in supporting and complying with such regulations set out to govern the marketing and distribution of our products, Glynn told shareholders.