Jamaican Teas Group experienced its best financial results by far since they listed on the Junior Market of the Jamaica Stock Exchange (JSE) nine years ago, reported Managing Director John Mahfood.

The Group’s net profit for the year increased by $201.2 million, moving from $198.5 million in 2018 to $399.7 million in 2019, ending the fourth quarter with net profit increasing from $59.5 million to $180.8 million.

For the current quarter they reported realised investment gains of $8m, versus almost $4m in the group’s year ago quarter, and fair value gains of $250 million, versus unrealized gains of $44 m in the group’s year ago quarter.

The Group also held investments in real estate that played a significant role in the improved profit for the year, with the Group’s investment properties producing $72.3 million in gains, compared with $24.8 million in 2017/8.

The main tea business held its own even as they suffered a temporary setback in sales in the USA market due to their main distributer there right sizing its inventories, he reported.

During the quarter QWI Investments Limited, the company established to hold the group’s equity investments, offered shares for sale to the public in September 2019.

The issue was oversubscribed, raising $1.2 Billion from over 4,800 new shareholders as trading in QWI’s shares began on the JSE main market on 30 September.

Following the IPO Jamaican Teas and KIW International now control 34 percent of the company.

Construction of H Mahfood and Sons Limited’s new apartment complex in the Manor Park area continued to progress and they expect to commence sales of units in the building in 2020.

JTL’s fourth quarter revenues from manufacturing operations increased almost 4 percent for the quarter from $272.8 million to $282.5 million due to increased export sales partly offset by lower domestic sales.

Supermarket sales show a decline for the quarter from $121 million to $ nil, as a result of the transfer of the supermarket to their associated company, Bay City Foods Ltd (BCF) on Feb 1, 2019.

BCF has contributed over $12.6 million to the Group’s interest income over the last 8 months, versus nil in the prior year to date, plus a further $2 million share in the company’s net income.

The Groups’ gross profits fell 22 per cent in the quarter as there were no retail or real estate sales this quarter, but the gross profit margin improved from 21 % to 24%.

For the year gross profits improved by $10 million due mainly to the non-recurrence of the losses reported at Orchid Estates in 2018.

The increase in administration expenses for both the quarter and the year to date primarily reflects accrued management incentive costs at QWI following the company’s incorporation in Dec 2018.

Shareholder’s equity increased from $1.2 billion to almost $1.6 billion.

Investment properties increased from $183 million to $312 million.

Between June and Sept 2019 QWI borrowed over $400 million to fund its investments and this was included in Accounts Payable at year end.

These purchases together with over $300 million in fair value gains recognized in the same period contributed to the significant growth in the Groups quoted investments holdings to $1.3 billion.

$1.192 Billion, being the proceeds of QWI’s IPO, are included in Other Receivables at the year end. These monies were received in October 2019, after the year end.

In October 2019 JTL purchased the 50% of BCF it did not already own. As a result, BCF became a wholly owned subsidiary of the Group and the Group’s future earnings reports will once again include the sales and profits of the Shoppers Delite supermarket.

In 2019 they accounted for BCF as an associated company and only showed their share of its profit and net assets in financial statements.

Sales at the supermarket in October were ahead of October 2018.

During the month of October, QWI experienced a decline in its investment portfolio, which is expected to reverse later in the quarter as December is traditionally a period of rising share prices in Jamaica.

Local and export manufacturing sales in October 2019 were well ahead of October 2018.

The Jamaican Teas Group closed the period with earnings per share from continuing operations of 57.8 cents up from the 29 cents reported in the 2017/8 financial period.