Douglas Orane, CEO GraceKennedy, has just signed a new contract extending the company's arrangement with Western Union. - Junior Dowie/Staff Photographer

GraceKennedy boss Douglas Orane Friday dismissed rumours that the conglomerate was set to lose its lucrative deal to represent the United States money transfer company, Western Union, in Jamaica and several other Caribbean countries.

"This rumour that you speak of is not true," Orane said in response to a queryFriday during a briefing of investors at which he reported on the group's first-quarter performance.

The conglomerate made sales of $10.56 billion and net profit of $594.6 million in its three months to March 31.

On those numbers, revenue was up 20.4 per cent, while profit attributable to shareholders increased 24.7 per cent. Directors approved a dividend payment of 45 cents a share for the quarter, Orane reported.

The Western Union franchise falls under GraceKennedy Remittance Services (GKRS) and would have been a major contributor to that operation's $1.96 billion in revenue and $59 million of profit last year.

The profit was a near 80 per cent decline on that for 2005, the result of a write-off of over $400 million in receivables and because of fraud.

But Orane suggested that these issues had not impacted on GraceKennedy's deal with Western Union, the world's largest money- transfer company

"We have an excellent relationship with Western Union," he said. "We continue to represent them. We recently signed an agreement that extends the relationship several years into the future."

At Friday's briefing, Orane and his key executives reported that after a major reorganisation, following two years of relatively weak performances, GraceKennedy was rebounding.

2006 Sales up pre-tax profit down

In 2006, the company had sales of $36.1 billion, up 9.3 per cent, but its pre-tax profit of $2.52 billion was down over 17 per cent, while its after-tax earnings of $1.87 billion was down nearly 12 per cent. This followed slippage the previous year.

"We have taken some tough decisions and we are seeing the results," said Orane.

GraceKennedy executives also said that good progress had been made in integrating its recent acquisition of the U.K.-based ethnic and speciality foods supplier, WT Foods.

That acquisition will add over US$120 million in sales to the GraceKennedy turnover, or about a fifth of current revenue.

The WT Foods brands will complement other GraceKennedy brands in the market, they said, provide opportunities to expand sales in Europe, the Middle East and Asia, as well as provide Grace the opportunity to control its distribution chain in Britain.

business@gleanerjm.com