Making good on a promise in January, Salada Foods Jamaica Limited has declared dividend of 30 cents per share, and will pay out $31.17 million to shareholders on December 14.

It breaks a two-decade drought on profit-sharing with holders of equity in the company, and was announced as the coffee company reported an increase in yearend profit at September 30, 2009, though the company had said, initially, that distributions weren't likely before next year.

Salada, which is now majority-owned by Donovan Lewis, through his companies Three Bears and Ideal Group, has some 525 shareholders on record.

Salada grew profit 43.6 per cent to $108.2 million or earnings per share of $1.04, from turnover of $432.4 million.

The company, owners of the Mountain Peak brand, claims 85 per cent dominance of the domestic coffee market.

The growth in revenue - by 9.8 per cent - "resulted from increases in both prices and the change in the distribution arrangement during the year," Salada said in a note to shareholders.

The coffee manufacturer signed Musson as exclusive distributor for its full range of products in Jamaica, ending the arrangement it had with Lasco Distributors Limited, which, up to then, handled about a quarter of Salada's local distribution, while Musson had 75 per cent.

Assets

Internationally, Salada channels its products through 18 companies located across the Caribbean, the United States, Canada and United Kingdom, which remains undisturbed by the deal with Musson.

Salada has assets valued at $527 million - $275 million of which is held as cash - and a net value of $457 million.

The company on Wednesday traded up 17.5 per cent at just under $15, or 14.4 times earnings per share.

The stock has gained more than five per cent in value since the dividend announcement and financial results posted Friday.

business@gleanerjm.com

SOURCE: Financial Gleaner, Friday, November 27, 2009