Margins squeezed Grace’s profit

Grace HQGrace Kennedy reported flat profits for the 2014 year although revenues grew 20 percent for the year to reach $83.5 billion. Grace ended with net profits of $3.29 billion compared with $3.22 billion due to shareholders of the group.
Not even lower taxes that delivered savings of $200 million could push the performance that saw lower pretax profit of $4.85 billion versus $5 billion in 2013.
Gross profit climbed from $64 billion to $74.9 billion but profit margin declined to 4.13 percent from 5.23 percent in 2013. Frank James Group Chief Financial Officer attributed some of the decline to one off cost associated with the acquisition of the Le Fe subsidiary during the year and tightness in the local economy that placed pressure on the margin as the devaluation to the local currency pushed up cost which they were not able to pass on in full. But there is more to it than that. Grace’s segment results showed no growth in segment profits between the September and December quarters, in food trading and insurance, two important profit areas of the group. Profit in the last quarter was make primarily by Hardware and Lumber and money transfer.
Results for segments were mixed with money transfer ending with $2.39 billion up from $1.9 billion, Insurance rose from $122 million to $454 million. Food retailing ended at $875 million from $1.145 billion in 2013 and hardware & Lumber reported $284 million versus $343 million in 2013.
The group reported earnings of $9.90 per share and announced an interim dividend of 75 cents per share payable on May 18, 2015 to shareholders on record as at April 28 with the ex-dividend date being April 24. Return on equity for the group is only 9.5 percent a relatively low rate in a country where Treasury bill rates were close to that level during the year.

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  1. […] Equity Partners Inc. along with its affiliates and associates a release from Grace Kennedy said. Grace Kennedy Group CEO, Don Wehby, stated “As previously indicated GraceKennedy’s decision to sell our shares […]

  2. […] and Montserrat and the British Virgin Islands. The market should be quite lucrative for the Grace Kennedy group, as it is the fourth largest country from remittances into Jamaica with US$124 million […]

  3. […] D&G closed with a bid to buy 5000 units at $15.01, nearly $2 above the last traded price. Grace Kennedy ended with 40,000 shares trading at $64, Jamaica Broilers closed at $6.50 with 119,681 shares […]

  4. […] lower at $49. Desnoes & Geddes traded 80,135 shares to close at $7, after gaining 18 cents, Grace Kennedy traded only 1,000 shares at $64 but had no shares on offer, at the close, for the third day running. […]

  5. […] climbed 1,521.83 points to be at 101,223.14 and the junior market is up 2.45 points to 982.77. Grace Kennedy traded 2,000,000 shares at $64, National Commercial Bank had 1,073,614 trading between $27.72 to […]

  6. […] in the prices of Gleaner, Grace Kennedy, Jamaica Broilers and a fall in Sagicor Group from $13 to $12.55 dented the main market indices in […]

  7. […] Index added 1.10 points at 1,951.11 and the Cross Listed Index rose 0.02 to 45.04. Gains| Grace Kennedy had 1,000 units changing hands at $3.51 for a 1 cent gain, Guardian Holdings with 14,545 shares […]

  8. […] hands, to close at 50 cents, Carreras dropped $1.39 but with just 1,685 shares trading at $48.60, Grace Kennedy traded firm at $63.50 with 9,153 shares, Hardware & Lumber dropped $4.50 with 5,000 shares […]

  9. […] to be at 100,935.78 and the junior market index 916.82, down 1.66 points. Significant trades are Grace Kennedy with 1,399,021 units, Jamaica Stock Exchange 2,105,142 shares, JMMB Group 8,580,291 shares Lasco […]

  10. […] Bank closed at $35 with 4,166 shares changing hands, Flavorite Foods traded 7,500 shares at $4.80. Grace Kennedy closed with 50,000 shares changing hands at $3.60, Guardian Holdings had 2,600 shares trading at the […]

  11. […] Grace Kennedy is advising that the terms to dispose of their holdings in Hardware and Lumber (H&L) include a maximum price of J$18.50 per ordinary share subject to conditions and with completion anticipated by the end of July. The above price is just around book value at the end of March this year and would give Grace Kennedy who owns 58.1 percent of the 80.842 million shares in issue, $845 million. Don Wehby CEO of Grace indicated that the agreement is conditional and stated that “GraceKennedy is looking forward to the conclusion of the transaction in a timely manner and will communicate further as soon as it is finalized.” He reiterated that Grace Kennedy’s decision to sell its shares in H&L was a strategic one, having regard to its core strategy of expansion in the foods and financial services sectors. He added, “We feel very positive about the continued growth of H&L under the prospective new owners who have signalled that they are excited about the possibilities for the future”. H&L currently comprises two separate divisions – Rapid True Value local supplier of hardware and home improvement products, and the Agro Grace business, local wholesaler and retailer of agricultural products. There are currently 10 Rapid True Value outlets across Jamaica, along with six Agro Grace Retail Centres. The company is headquartered at 697 Spanish Town Road in Kingston. Greystone Equity Partners Inc. the proposed purchaser is a Caribbean based and Caribbean focused private equity firm with a stated strong commitment to the Caribbean. H&L reported profit in 2014 of $217 million or $2.69 per share. Profit after tax for the three-month ended March, 2015 was $34.5 million, 14.5 percent less than the $40.4 million for the same period last year and earnings of 43 cents per stock unit, compared to 50 cents for the comparative period in 2014 after revenues fell 4.5 percent to $1.73 billion. […]

  12. […] Listed Index fell 1.62 points to end at 46.08. Gains| Stocks increasing in price at the close are, Grace Kennedy with 97,780 shares trading for $349,075 and gaining 1 cent, in closing at $3.57. IC Insider Buy […]

  13. […] changing hands. Desnoes & Geddes had 62,181 shares trading, to close 12 cents lower at $7.38, Grace Kennedy with 20,682 units changing hands, closed with a loss of 50 cents at $63. Jamaica Broilers shared […]

  14. […] at $50. Desnoes & Geddes traded 197,238 shares at $7.70 at the end, by putting on 45 cents. Grace Kennedy posted 25,988 units but lost $1.40, to end at $62.15. Jamaica Broilers put through 136,039 units and […]

  15. […] at $5, Carreras traded 211,982 shares to close at $49, Gleaner posted 322,432 units to end at $1, Grace Kennedy gained 5 cents to close at $63.55 with 45,627 units, the stock traded at $65 during the trading […]

  16. […] cents to close at $5.03, First Citizens Bank traded 2,165 shares to close 5 cents higher at $35.85, Grace Kennedy contributed 18,691 shares, to end with a gain of 3 cents at $3.5. Guardian Holdings with 37,409 […]

  17. […] / increased by 0.29 points to end at 44.61. Gains| Stocks increasing in price at the close are, Grace Kennedy with 49,642 shares trading for $173,727, closing at $3.50 with a 1 cent increase. JMMB Group […]

  18. […] 4 dominant trades, with Caribbean Cement accounting for $14,785,112 of the total value of trades, Grace Kennedy $13,881,820, National Commercial Bank $107,075,098 and Scotia Group with $30,890,865. Although there […]

  19. […] at $45 but traded as high as $46.50 for a new 52 weeks’ intraday high but lost $1 at the end. Grace Kennedy put through 26,573 units to gain 43 cents and end at $62.99, Jamaica Broilers put on 20 cents with […]

  20. […] in February and traded 12,000 shares to close at new 52 weeks’ high of $46 by rising 95 cents, Grace Kennedy closed with 5,300 shares changing hands at $62.56 by gaining 36 cents. Jamaica Producers continues […]

  21. […] Desnoes & Geddes gained 10 cents and traded 29,400 at $6 with an offer at $6.50 at the close. Grace Kennedy with 19,224 shares that traded closed at 90 cents higher at $63, Jamaica Broilers had 86,530 shares […]

  22. […] Investment Fund that gained 6 cents to end at $22.56 with 7,690 shares trading, valued at $173,506, Grace Kennedy with 59,325 shares trading for $213,571, ended at $3.60 for a gain of 5 percent. Guardian Holdings […]

  23. […] changed hands, ending in 4,036,900 units trading, valued at $124,288,838, in all market segments as Grace Kennedy and National Commercial Bank controlled 1 million shares each. Main Market| The JSE Market Index […]

  24. […] 3,172,266 shares to close at 52 with a 2 cents gain. Carreras traded 104,311 units to end at $42, Grace Kennedy had 51,721 shares changing hands and lost $1.15, to end at $62.05, Jamaica Money Market Brokers […]

  25. […] selling prices and 4 with offers that were lower. Carreras traded 1,300,000 at $42 for a $1 fall, Grace Kennedy with 47,691 shares closed trading at $63 for a $2 fall, Jamaica Money Market Brokers 7.50% […]

  26. […] $22.05 for a loss of 45 cents and Proven Investments finished with 201,102 shares at 18 US cents. Grace Kennedy traded 3,850 shares at $65 for new 52 weeks’ highs and Supreme Ventures with 20,435 traded as high […]

  27. […] market. A total of 1.56 million units traded in the main market, with the dominant trades being, Grace Kennedy with 200,622 units in closing at $62.50, National Commercial Bank with 143,351 shares with a closing […]

  28. […] main market are, Carreras finishing with 853 units trading, to close with a gain of $1.05 at $41, Grace Kennedy closing with 2,390 shares, trading with a gain of 50 cents to $61.50. Jamaica Money Market Brokers […]

  29. […] $1 to $40, Desnoes & Geddes with 28,745 units trading, closed lower by 5 cents at $5.40. Grace Kennedy concluding trading with 7,475 units to close down by 49 cents to $61.01, National Commercial Bank […]

  30. […] Fund trading 45,830 shares valued at $1,035,550 and advanced by 10 cents to end at $22.60, Grace Kennedy trading 301 shares to close with a gain of 1 cent, at $3.55. Massy Holdings in trading 35 shares, […]

  31. […] the initial negative reaction to increased taxation on cigarettes to gain $1.05 to close at $41 and Grace Kennedy up 50 cents to $61.50, both on small […]

  32. […] 648 shares trading at $2.30, Desnoes & Geddes ending trading with 26,804 shares at $5.45, Grace Kennedy finishing trading with 6,781 shares at $61, Kingston Wharves while exchanged 1,190 units at $6.40, […]

  33. […] 7,757 shares trading at $2.30, Desnoes & Geddes ending trading with 80,000 shares at $5.40, Grace Kennedy while exchanged 11,750 shares at $61 and Jamaica Money Market Brokers contributed 2,000 ordinary […]

  34. […] to end at $22.5, First Citizens Bank trading 5,917 shares, valued at $209,817 to close at $35.46. Grace Kennedy trading 1,500 shares at $3.60, National Flour Mills exchanging 800 shares at $1.55, Point Lisas […]

  35. […] Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Grace Kennedy ending with 45,972 shares, gained 6 cents to $61.06, Jamaica Broilers closing with 88,054 shares […]

  36. […] market are, Gleaner in having 8,267,155 shares changing hands, closed higher by 19 cents at $1.10, Grace Kennedy closed trading with 15,600 shares trading to gain 50 cents to end at $62, Hardware & Lumber […]