GK delivers $3b profit - Hangs on to Orane as chairman
Published:Friday | March 2, 2012 | 12:00 AM
Douglas Orane, whose contract as executive chairman runs out in four months, will be retained in the same position by the conglomerate he ran for more than a decade, but as a non-executive director of the board.
Orane, who turns 65 this year, gave up the position of group CEO last year to Don Wehby but remained as executive chairman under contract for a year.
GraceKennedy executives retire at 65, which would disqualify Orane from retaining the latter position beyond his next birthday on December 8. The position of non-executive chairman, which he will assume on July 1, allows him to remain on the board until he hits age 72.
His contract, however, is for 18 months, GraceKennedy said in a market filing Wednesday.
Orane has had a successful run at the food and financial services conglomerate, turning out peak profit of J$3.5 billion in 2007, and growing revenues to J$57 billion in 2009.
The group continued to grow through the transition, with revenue hitting a new peak of J$58 billion at yearend December 2011. Net profit was just shy of J$3 billion or J$8.33 per share, which was 25 per cent higher than the J$2.4 billion made in 2010.
GK will pay dividends of 60 cent per share or J$200 million to shareholders based on these results.
The 2011 profit surge at the conglomerate, based in downtown Kingston, came primarily in its money services and banking segments, however, all five business segments increased in profitability.
Orane retired as an employee of GraceKennedy on June 30, 2011 but assumed the position of executive chairman on July 1.
His post-retirement remit involves providing leadership to the board, further developing corporate governance best practices, monitoring and strengthening relationships with shareholders, business partners and other stakeholders and guiding the new chief executive officer and his team, according to a previous release to shareholders.
Prior to this position, he served as chief executive officer from 1995 and in 1998 assumed the dual position of CEO and executive chairman. He joined the group in 1981.
Investors seemed to have rewarded GraceKennedy for its smooth leadership transition and performance. Its stock price has jumped 23.5 per cent year on year from J$51 to J$62.99.
Request for comment to GraceKennedy CEO Don Wehby were unanswered up to press time.
The conglomerate reported revenues of J$58.2 billion, or 5.2 per cent more than in 2010. The rate of growth in revenue outpaced the increase in the cost of doing business, which was 4.2 per cent higher at J$55 billion.
The food segment recorded pre-tax profits of $617.1 million, 26.5 per cent; retail and trading made J$126.8 million, up 22 per cent; banking and investments contributed J$913.6 million, up 67 per cent; insurance segment contributed J$394.6 million, up 67 per cent; and money services segment generated the majority of profits at J$1.5 billion, up 26 per cent.
The group remained flush with cash of J$10.9 billion, but this reflected a decline of J$1 billion from the previous year.
GraceKennedy at yearend was worth J$30.6 billion by shareholder equity and J$100 billion by total assets.