Expenses climbing at the same time
Contract furniture company, JFP Limited is entering its first full year as a public company next month as a much stronger and profitable entity.
Having gone public in March 2022, through a very successful initial public offer which was heavily oversubscribed, the supplier of furniture for hospitality clients and offices closed 2022 on a high with a healthy balance sheet and a strong financial performance. During the year, revenues and gross profit doubled.
However, expenses climbed significantly due to a number of marketing blitz undertaken throughout the year. Revenues recorded a 104 per cent increase moving from J$233.74 million in 2021 to J$476.39 million in 2022, while the cost of sales rose by 89 per cent to J$244.36 million, up from J$129.10 million in 2021.
The growth in revenue led to a significant rise in JFP’s 12- months gross profit, which rose to J$232.03 million from J$104.64 million in 2021.
Marked drop in other income
Other income closed the year at J$11.75 million down 85 per cent from J$77.31 million booked 12 months earlier. The management notes that, “this was a result of reduced income from the current investment at GK Capital. A number of equity shares held saw a significant decline in value.”
This resulted in an operating profit for the year going up slightly to J$30.99 million, relative to an operating profit of $25.97 million in 2021. Profit before tax grew to J$15.21 million (2021: J$8.33 million), while there was no taxation for the period under review (2021: nil).
As a result, net profit for the year closed at J$15.21 million (2021: J$8.33 million). For the December quarter, the company incurred a net loss of $27.98 million versus net profit of J$3.33 million in the prior comparable period.
Higher expenses incurred
Total operating expenses grew by 36 per cent to J$212.79 million (2021: J$155.97 million). Of total expenses, administrative and selling & distribution expenses grew by 32 per cent and 133 per cent respectively, to J$195.49 million (2021: J$148.54 million) and J$17.31 million (2021: J$7.44 million) respectively.
The management explains that the increase in selling and distribution expenses was due to, “JFP participated in an increased number of trade shows and the overall increase in sales over the financial year led to an increase in the commission for external sales representatives”.
As at December 31, 2022, JFP had total assets of J$520.44 million (2021: J$357.56 million), reflecting a 46 per cent year-over-year increase. The primary increase in the asset base is due to ‘Cash and cash equivalents’ closing the period at J$42.47 million (2021: J$12.39 million) and ‘Receivables’ which amounted to J$166.07 million (2021: J$36.30 million).
Shareholders’ Equity amounted to J$192.59 million (2021: J$56.10 million). As a result, as at December 31, 2022 the company book value per share increased to J$0.17 from J$0.05 in the prior year.