JP revises dividend policy after strong HY results
Published:Wednesday | September 1, 2010 | 12:00 AM
Jamaica Producers (JP) Group Limited reported flat sales and operating profit in the second quarter ending July 3, covering 13 weeks of operation, but was flush at the bottom line due to a one-off gain of more than J$80 million from disposal of some investments.
The company's board has also voted to share, at minimum, 15 per cent of annual after-tax profit with shareholders, starting this year.
Producers made profit of J$135 million in the July quarter, more than double last year's J$59 million in 12 weeks to June 30, notwithstanding flat sales of J$1.5 billion and unchanged operating profit of J$58.8 million.
Its European Division continued to lead with revenue of J$2.38 billion versus J$2.18 billion a year ago.
The group, however, lost money on its joint venture snack business in the Dominican Republic, resulting in a J$7 million write-off in the current half year, relative to a positive J$7.5 million share of profit in the 2009 period.
For the half year, sales were up by more than J$290 million to J$3.1 billion, operating profit tripled from J$38 million to J$105 million, and net profit doubled from J$100 million to J$203 million, pumped up by J$109 million, pretax, of proceeds from asset sales.
The numbers compare 26 weeks of business for the group in HY 2010 to 24 weeks in HY 2009.
JP's new dividend policy is "subject to periodic review on the basis of available cash flow, the operating and economic environment and the financing requirements for growth opportunities," said JP in a stock market filing.
The company paid dividend of 15 cents per share - amounting to some J$28 million - on its 2009 results after an impressive turnaround from a J$2.86 billion loss to net profit of J$210 million.
Its operating cash has moved from a deficit of J$52 million to a positive flow of J$59 million in the current period, while net cash has strengthened from J$287 million to J$324 million.
The dividend distribution amounted to 13.4 per cent of 2009 profit. None were paid in 2008.
In the current quarter, JP expects that sales will continue to be challenged by seasonal reductions in demand for its products, but says its business strategy allows for opportunity to diversify its revenue base in such periods.
JP at July 3 had a book value of J$4.98 billion or J$26.64 per share. The company has cut its exposure to debt from $102 million at December 2009 to J$38 million year-to-review date.