Mark Hart, Executive Chairman and Interim-CEO, along with Co-Chairman Tom Tyler, illuminated CPJ's remarkable trajectory. CPJ commands a central role in Jamaica's hospitality sector as the purveyor of choice for food and beverages to all major hotels in Jamaica. It also has a growing presence in the retail space and is now expanding more than ever in St. Lucia.
The Company demonstrated substantial growth in the past fiscal year with sales showing a noteworthy increase of 19%, reaching US$142.5 million. Gross profit also experienced commendable growth, rising by 12% to reach US$39 million while maintaining a healthy margin.
On the expense side, selling and administrative expenses grew by 35%, totaling US$24.6 million. This figure includes approximately US$1.9 million in one-off exceptional expenses. Operating profit, however, saw a decrease of 17% to US$10.25 millionSimilarly, net profit attributed to shareholders fell by 23% to US$5.7 million, compared to US$7.5 million in the previous year. After adjusting for extraordinary expenses, the profit would have increased to US$8.2 million, reflecting a 5% improvement.
The balance sheet showed positive trends, with inventory days falling by 20% to 135 days and accounts receivable decreasing by 12% to 48 days. CPJ efficiently managed its working capital, resulting in a US$20 million improvement.
Gary Peart, CEO of Mayberry Investments Limited, praised CPJ’s results, saying "CPJ's adept management of working capital is truly commendable. The anticipation of inventory reductions and lower interest costs is a positive sign for the Company's financial health. As CPJ continues its growth trajectory, there's a hopeful prospect for future dividends, which will undoubtedly resonate with shareholders."
Tom Tyler acknowledged that they are currently carrying a relatively high level of inventory, around 140 days. He mentioned potential improvements in the days of inventory as global conditions and the new ARP system stabilise. The goal is to bring this figure down to 90 days, which would inject a significant amount of cash back into the Company, enabling further expansions.
In terms of leverage, CPJ demonstrated favourable ratios. The Company maintained a debt-to-total capital ratio of 45%, a debt-to-EBITDA ratio of 1.6 times, and an interest coverage ratio of 4.3 times.
Mark Hart and Tom Tyler provided insights into CPJ's performance. They highlighted a strategic shift in revenue allocation, with an increased focus on expanding the retail segment in Jamaica and St. Lucia. The anticipated completion date for the expansion of the Company's manufacturing plant is projected for the second quarter of the following year, with a focus on enhancing meat processing capabilities.
Mark emphasised the Company's dedication to meeting customer expectations.
"Ensuring customer satisfaction is paramount for us at CPJ. We take it personally if we fall short of our commitments, especially to our valued hotel clients. A dependable supply chain is the backbone of our business, and we're dedicated to upholding it," he exclaimed.
Looking ahead, CPJ envisions sustained growth, setting ambitious targets for sales volume. With strategic investments in technology and infrastructure, along with the expected surge in tourism, CPJ aims to further bolster its market presence and financial performance.
Dan Theoc, VP of Investment Banking at Mayberry Investments, alluded, "I'm impressed by how CPJ navigated challenges and achieved substantial growth. With adjustments, it could have been their best year ever. Looking forward, I see the potential for US$170 million in revenue in the next fiscal year and US$200 million the year after, while maintaining a 6% net profit margin. The future looks bright for CPJ,” Dan remarked.
Mayberry Investments Limited remains confident in CPJ's trajectory, emphasising its potential for continued growth and profitability.
