The Jamaican Teas Group enjoyed rising sales during the first quarter of the 2024/25 fiscal year and this trend is expected to carry over into the balance of the year.
Manufacturing Division | The highlight for the quarter was the gain in our export sales which rose 38 percent over the prior year. The 6 percent decrease in our local manufacturing sales primarily reflects the high level of sales that took place to Wisynco in the year ago quarter as they built their inventories at the commencement of their new distribution agreement with us which began on Nov 1 2023.
Real Estate Division | Two studio sales were booked this quarter this year versus four in the year ago quarter following the launch of sales at our Belvedere Road project in October 2023. Booked and / or completed sales at the complex have reached the half way stage with 15 studios sold or under contract at time of writing. Retail Division | For this quarter, retail revenues amounted to $219 million, an increase of 10 per cent. This reflects a continuation of the accelerated revenue growth we have seen in our store in recent months.
Investment Division | During this quarter, the prices of stocks on the Jamaica Stock Exchange Main Market increased although prices on the junior market declined. USA Stock Exchanges improved in the quarter. The unrealised gains in our overseas investments were however much lower than a year ago due to declines in the values of our holdings in several home building and construction companies as well as a significant decline in the value of the shares of one of the computer companies we hold. Some of these declines have reversed themselves in January 2025.QWI Investments Limited (QWI) reporting a small net loss of $10 million for the quarter, a significant reversal from their year ago profit of $18 million. While the market outlook is unclear, QWI may not experience profit growth if the profit results of our main investee companies do not continue their improvements over a year ago.
Revenues | JTL’s total revenues for the quarter increased by 9 per cent overall from $840 million a year ago to $913 million this quarter. The reduction in Investment Income mainly reflects the lower unrealised investment gains of QWI referred to above along with higher realized losses recognized from a higher than usual level of share sales undertaken by QWI this quarter. Higher dividend and interest income compared with the year ago period offset some of these unfavourable developments. QWI halved its share portfolio in Trinidad in the quarter due to the disappointing profit outlook of one of its investees. In addition, the company also exited several other investments due to unexpected adverse changes in the business of several of our holdings.
Expenses| The increases in Cost of Sales for the quarter were outpaced by the growth in revenues. As a result our gross profit margin rose from 18.5 per cent a year ago to 20.3 percent this quarter. This improvement arose in part from the consolidation of our two former factory premises into our current factory at Temple Hall which was completed on 31 August 2024. This helped to eliminate expenses duplicated over two premises versus one now. The lower level of low margin real estate sales this quarter also assisted in the margin improvement.
Other expenses were little changed in the quarter except for interest expense which was $4m lower due to lower debt levels and lower interest rates.
Net Profit | Net profit attributable to Jamaican Teas for the quarter was $53 million, a 12 percent improvement from the $47 million profit in the same quarter of the previous year. Total attributable comprehensive income per share was 2.4 cents.
Financial Position| The increase in fixed assets since September 2024 is due mainly to improvements made to the Temple Hall premises. Receivables rose by 15 per, similar to the trend in revenues in the quarter. QWI’s investment portfolio was reduced in size during the quarter due to the share sales referred to earlier. The reductions in inventories reflect real estate sales since Sept 2024 as well as the continuation of right sizing practices in the manufacturing plant purchasing department.
Outlook| The Jamaican economy is heavily dependent on tourism for foreign exchange and employment and its impacts on the wider economy with its linkages to locally produced goods and services. To this end, the continued rebound in visitor arrivals in recent months is encouraging. The recent decreases in interest rates locally will also improve the prospects for our Group.
John Mahfood – Chief Executive Officer/Director Jamaican Teas Group
