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JAM | Feb 5, 2025

Jamaica Teas reports rising Q1 sales

/ Our Today

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John Mahfood, chief executive officer of Jamaican Teas Limited. (Photo: Facebook @theJMEA)

Durrant Pate/Contributor

Jamaica Teas Limited posted a modest net profit of J$53 million for the first quarter ended December 2024, due to rising sales during the period.

This saw net profit improving by 12 per cent from the J$47 million profit made in the same quarter of the previous year. Total attributable comprehensive income per share closed on 2.4 cents, up from 2.2 cents during the corresponding period in 2023/2024.

Company chairman John Jackson and CEO John Mahfood report that the rising sales experienced during the first quarter is expected to carry over into the balance of the year. The highlight for the quarter was the gain in export sales of the manufacturing division, which rose 38 percent over the prior year. 

Decline in local manufacturing sales 

At the same time, there was a six per cent decline in local manufacturing sales, which primarily reflects the high level of sales from Wisynco, as the company built its inventories at the commencement of the new distribution agreement with Jamaica Teas, which began on November 1, 2023. 

In the real estate division, two studio sales were booked during the review quarter compared with four in the previous year’s quarter following the launch of sales of its Belvedere Road project in October 2023. Booked and/or completed sales at the complex have reached the halfway stage, with 15 studios sold or under contract at the time of this report.

Turning to the retail division, revenues amounted to J$219 million, an increase of 10 per cent. This reflects a continuation of the accelerated revenue growth seen in Jamaica Teas store in recent months. 

Investment division 

During this quarter, the prices of stocks on the Jamaica Stock Exchange main market increased although prices on the junior market declined. US stock exchanges improved in the quarter but the unrealised gains in the company’s overseas investments were however much lower than a year ago. 

This was due to declines in the values of holdings in several home building and construction companies as well as a significant decline in the value of the shares of one of the computer companies we hold. Some of these declines have reversed themselves in January 2025.

QWI Investments Limited, the Investment subsidiary is reporting a small net loss of J$10 million for the quarter. This represents a significant reversal from their year-ago profit of J$18 million. 

While the market outlook is unclear, QWI may not experience profit growth if the profit results of our main investee companies do not continue their improvements over a year ago. 

Increase in overall revenues

Total revenues for the quarter increased by nine per cent overall moving from J$840 million a year ago to J$913 million this quarter. The reduction in investment income mainly reflects lower unrealised investment gains of QWI referred to above along with higher realised losses recognized from a higher-than-usual level of share sales undertaken by QWI this quarter. 

Jamaican Teas Limited’s Bell Road headquarters in Kingston, Jamaica. (Photo: jamaicanteas.com)

Higher dividend and interest income in contrast to the year-ago period offset some of these unfavourable developments. QWI halved its share portfolio in Trinidad in the quarter due to the disappointing profit outlook of one of its investees. 

In addition, the company also exited several other investments due to unexpected adverse changes in the business of several of our holdings.

Increases in ‘cost of sales’ for the quarter were outpaced by the growth in revenues. 

Gross profit rose

As a result gross profit margin rose from 18.5 per cent a year ago to 20.3 per cent this quarter. This improvement arose in part from the consolidation of our two former factory premises into our current factory at Temple Hall which was completed on August 31, 2024. 

This helped to eliminate expenses duplicated over two premises versus one now. The lower level of low-margin real estate sales this quarter also assisted in the margin improvement. Other expenses were little changed in the quarter except for interest expense which was J$4 million lower due to lower debt levels and lower interest rates. 

The increase in fixed assets since September 2024 is due mainly to improvements made to the Temple Hall premises. Receivables rose by 15 per, similar to the trend in revenues in the quarter. 

QWI’s investment portfolio was reduced in size during the quarter due to the share sales referred to earlier. The reductions in inventories reflect real estate sales since Sept 2024 as well as the continuation of right-sizing practices in the manufacturing plant purchasing department.

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