Durrant Pate/Contributor

Spur Tree Spices Jamaica Limited has broken the J$1 billion sales threshold, reporting a 20 per cent rise for the year ended December 31, 2022.

Sales revenue for the year amounted to J$1.03 billion, up from the J$859.72 million posted in 2021. This was due in part to a strong December quarter in which revenue surged 45 per cent to $356.47 million coming from J$245.42 million booked for the previous December of 2021.

Cost of sales rose by 21 per cent for the year to $697.44 million (2021: J$577.42 million). Administrative and other expenses rose by 37 per cent to J$195.26 million, up from the J$142.26 million recorded a year prior.  

Management attributes the higher expenses mainly due to “the increase was mainly due to higher staff and rental costs, marketing spend and acquisition expenses.”

Profitability improving

At the end of 2022, Spur Tree Spices made a net profit of J$115.62 million, up from the J$91.32 million recorded for 2021. Gross profit increased year-on-year by 17 per cent moving from J$282.30 million in 2021 to J$331.09 million for the year under review.

Gross profit for the December 2022 quarter rose a mere 1per cent to J$92.83 million, up from J$91.85 million in 2021. However, operating profit for the period went down by 10 per cent to J$126.01 million (2021: J$140.27 million).

Pre-tax profit closed the year at J$113.44 million relative to J$124.14 million in 2021. Earnings per share for the year was J$0.07 relative to J$0.07 in 2021. Spur Tree Spices stock price closed last week at a price of J$2.49 with a corresponding P/E ratio of 36.81 times.

During last year, the spice and seasoning manufacturing company acquired a property in Port Morant, St Thomas to increase its productive capacity and maximise output from that area, as well as diversify its offerings under the Spur Tree brand. The acquisition of a majority stake in Canco Limited represents the company’s most significant investment for 2022.

Spur Tree Spices now owns and distributes products under the Linstead Market brand, with over 90 per cent of its business being generated from exports. This investment gives the company a much stronger presence in the lucrative ackee export market with the goal of building and expanding the iconic Linstead Market brand well beyond its current reach.

Balance sheet highlights:  

Spur Tree Spices, as at December 31, 2022, had total assets of J$1.50 billion (2021: $596.68 million). This was primarily due to ‘Property, plant, and equipment’ which increased to J$700.43 million (2021: J$173.36 million). ‘Intangible assets’ also contributed to the overall asset growth valuing J$187.37 million (2021: J$11.39 million).

Total Stockholders’ equity attributable to shareholders as at December 31, 2022, closed at J$713.18 million (2021: J$411.26 million). This translated into a book value per share of J$0.43 (2021: J$0.25).