Durrant Pate/Contributor

Entertainment company, Kingston Live Entertainment Limited (KLE) is promising that its Bessa Villas real estate project in Oracabessa, St Mary will result in the business coming out of the red.

For the 2023 financial year, KLE incurred a total loss from operation of J$2.3 million, coming from a profit in 2022 of J$5.5 million. The total comprehensive results for the year moved from a positive J$24.9 million in 2022 to a negative J$23 million in 2023.

The group declined in profitability during the current year, mainly attributable to losses incurred from subsidiary Bessa Resort Management Limited, and T&R Restaurant Systems Limited, an associate company.  Despite this, management is optimistic about the prospects of the business with a short-term growth strategy centred around the opening of Bessa Villas, which it says will generate key earnings in its subsidiary, Bessa Resort Management Limited. 

Strategy for coming out of the red

The plans and projections of Bessa Villas continue to be favourable; poised to add great value as well as capital to the group. Bessa Resort Management has over the last year developed many models for the management and has discussed in principle numerous ways in which it will maximise its earnings potential in the ever-booming tourism and hospitality industry. 

During the current financial year, KLE is expected to realise the gains from Bessa Villas, which is a joint venture project with Sagicor, as the project comes to an end. This will add a significant increase to the net profit results of KLE. 

According to management, “The projections of the associate company indicate that the company will report a profit for the next year which will improve the overall results of the group. The associates plan to improve key aspects of its business to increase its profitability as well as the overall brand position in the marketplace.”

The company shared in its just-released 2023 annual report that, “The board of directors and management are also aggressively pursuing additional business opportunities.” KLE is expecting to report a net profit for the next 12 months, as much of 2023 was spent focusing on areas, where short-term growth can be achieved, while the company has designed programs for its subsidiary and associate company to achieve profitability in 2024 and beyond. 

Financial highlights

KLE recorded other operating revenues of J$54 million in 2023 compared to J$18 million in the prior year. The increase in revenues is directly related to a marketing commission earned from the sales of the Bessa units. 

The amount recorded in the current year represents 50 per cent of the amount due and payable. KLE Group Limited is expected to earn two per cent of the total income earned from the sales of the units.

Administrative and other expenses moved from J$12.46 million in 2022 to J$56.33 million in 2023. The majority of the increase is related to professional fees incurred in Bessa Resort Management Limited geared towards the set-up and management of the business, as it finalizes its plans to commence operation. 

In the meantime, KLE Group Limited has continued its strict and lean budget as expenses remain unchanged over the dual-reporting period. Total liabilities continue to decline in  2023 mainly due to little or no new liabilities as well as continued efforts to reduce the group’s outstanding debts.

Shareholder equity contracting

Last year total liabilities stood at J$109 million compared to a J$96 million low in 2023. Shareholders’ equity declined significantly last year and is directly related to the negative earnings reported during the year. Also in 2023, the business recorded negative earnings per stock unit. 

Earnings per stock unit for the year equalled ($0.24). From a cash flow point of view, KLE generated a negative cash flow from operating and financing activities. This is in line with the group’s strategies to pay out its long past-due obligations. 

The liquidity of the company also declined in the current year due to the classification of the loan as current. The company plans are geared toward increasing its liquidity position in the short term.