GK to pursue new markets for Grace brand
Published:Wednesday | August 3, 2011 | 12:00 AM
- Reports flat half-year results
GraceKennedy Limited reported marginally improved revenue over six months, led by its food division, which also shrugged off rising energy and raw material costs to contribute higher returns to the group at June 2011.
GK Food Division made J$589 million in operating profit, up J$33m on the HY 2010 period, on higher turnover, which moved from J$17.5 billion to J$19.2 billion.
"This performance was even more creditable in the face of the increased expenses including fuel, electricity and raw material costs," said GK in its half-year stockholder's report co-signed by executive chairman Douglas Orane and CEO Don Wehby, both of whom assumed those roles on July 1.
"The division, however, continues to pursue cost-mitigating measures including energy conservation and productivity improvements," the report said.
GK said its United Kingdom food subsidiary broke into a new market, Mexico, during the period, and that it would continue to pursue market expansion for its Grace brand in Latin America, Eastern Europe and southeast Asia.
Across the group, the food and financial services conglomerate turned over J$28.96 billion in the half-year period, up 3.2 per cent year on year, but cost of business expenses rose 4.5 per cent in the same period to J$27.6 billion.
The outcome, even accounting for other income, was a near J$200 million decline in operating surplus, which fell from J$2.1 billion in HY 2010 to J$1.94 billion in the current period.
All of the business segments under the financial division - banking/investments, insurance, and money services - reported lower income. However, the money services segment which includes GK's Western Union operations and Bill Express bill payment services, maintained its lead as the biggest contributor to group operating profit having posted gains of J$645 million, up J$73 million from J$572 million.
GK attributed the performance to a recovery in remittances.
Bottom-line profit was close to flat, dipping from J$1.375 million (J$3.74 per share) to J$1.354 million (J$3.69 per share).
The second-quarter performance was more outstanding with a 24 per cent increase in net profit, from J$540 million to J$671 million (J$1.84 per share), on the back of improved revenue of J$14.6 million, up by a billion dollars from J$13.6 billion.