Everything Fresh Reporting Mixed Results As It Pursues Consolidation And Integration Of Meat Experts Acquisition.
Everything Fresh Limited (EFL) is reporting mixed results for their second quarter, this as the company pursues the consolidation and integration of the acquisition of Meat Experts into the business.
In February of this year Everything Fresh, which is a food importer and distributor announced that it had acquired 100 per cent of St Catherine-based abattoir Meat Experts Limited for $50 million.
The company also announced at the time plans to spend an additional $30 million on upgrading the facility in “very short order”.
For the 6 months ended June 30 2019 the company recorded a total loss was $28.5 million, the net effect of a profit of $29.0 million attributed to the traditional distribution business and a loss of $57.7 million in the Meat Experts division.
The 6 months cost of sales for the Meat Experts division of $159.5 million includes second quarter one off charges of $7.3 million.
Managing Director Courtney Pullen in his report to shareholders, included in their most recent financials for the quarter ended 30 June, 2019, said overall sales for the second quarter grew 5% over the comparative period in 2018.
Of the current period’s amount of $520.5 million, $458.1 million relates to the traditional distribution business and $62.4 million relates to the new Meat Experts division.
Sales of the traditional business dipped by 7% versus the prior year as one of their major Hospitality Industry relationships closed for a major refurbishing exercise and will reopen early in the fourth quarter of this financial year.
Sales of the Meat Experts division for the first 6 months of 2019 were $159.1 million, with the Plant currently operating at approximately 30% of capacity.
The Company expects to continue to grow the sales of the Meat Experts division to improve the utilisation of the factory and absorb the associated overhead costs of the plant.
The gross margin in the trading division for the first six months ended 30 June 2019 was 14%, down from 15% in the comparative period of 2018, due to changes in the overall product mix.
In the second quarter of 2019 the Company entered into a wholesale relationship with a new customer for a few select items, with sales to this customer representing new business, however the margins were reduced to facilitate the venture.
Administrative and selling expenses in the Trading Division for the first six months increased by 21% to $99.0 million in 2019 compared to $81.7 million in the prior year, due mainly to an increase in human resource costs of $12.6 million, which took place in the second half of 2018 and the first quarter of 2019.
The Meat Experts administrative expenses are approximately $28.6 million per quarter.
In addition, depreciation increased by $1.6 million due to increased capital expenditure, electricity increased by $3.1 million due to increased refrigeration usage.
Exchange losses also increased by $3.6 million due to net foreign currency outflows that took place in the second quarter over a period when the Jamaican dollar weakened against the US dollar.
Everything Fresh Limited closed the six-month period with negative earnings per share of -JA$3.66 compared to a favorable and positive JA$5.52 in 2018.