Douglas Orane, GraceKennedy board chairman and chief executive officer. - Ian Allen/Staff Photographer
IN THE 10 years since articulating its 2020 Vision to transform from a Jamaican trading company to a global consumer group, GraceKennedy Limited recently announced that it had made significant growth in revenues, productivity, profits and market value.
COMPANY'S REVENUES
In 2005, the Company's
revenues were $33 billion compared to about $10.8 billion in 1995, an increase of almost 207 per cent. Profit attributable to stockholders was $2 billion in 2005 compared to $373 million in 1995, an increase of 456 per cent. Market value at the end of 2005 was $28.6 billion compared to $1.30 billion at the end of 1995, an increase of 2,119 per cent.
After-tax profits expressed in U.S. dollars per permanent employee has improved from US$4,140 per employee in 1995 to US$18,400 in 2005, an increase of 344 per cent.
DIVIDENDS PAID
For the year ended December 31, 2005, the group recorded sales for the year of $33 billion (compared to $30.7 billion in 2004), an increase of $2.3 billion, or almost 7.6 per cent. The net profit attributable to stockholders was $2.07 billion compared to $2.17 billion in 2004, a decline of $100 million, or 4.61 per cent.
Dividends paid to stockholders during the year were $327.0
million a 12 per cent increase over the $291.9 million paid in 2004. In keeping with the company's dividend policy, 15.8 per cent of profit attributable to stockholders was paid out as dividends. The market value of the company decreased from $38.45 billion at the end of 2004 to $28.63 billion at the end of 2005, a decrease of 25.54 per cent.
Commenting on the results, chairman and CEO, Douglas Orane said: "Revenues have
continued to grow which is encouraging in a Jamaican
market that, particularly since the middle of 2005, has been increasingly soft in terms of consumer demand. The profit outturn has been affected by the varying performances in the industries in which we compete. Our food trading and financial services divisions generated increased profits, whereas our information services and retail and trading divisions reported lower profits than the prior year."
The company spent a record $758 million in capital investments during 2005, a significant percentage of which was invested in information technology systems. GraceKennedy has also introduced management tools such as the balanced scorecard to ensure the steady development of people, brand building and improvements in internal efficiencies. The company plans to introduce enterprise risk management to make the organisation more robust in response to new risks and opportunities
STREAMLINING INTERNAL
OPERATIONS
Considerable attention has been directed to streamlining internal operations in order to reduce costs. Initiatives include the creation of a single shared services facility for all business units in the First Global group, a halving of the transaction costs of voice and telecommunications data in the information services division, the reduction in the number of limited liability companies in the Hardware and Lumber group to one single entity from six, and the increased use of teleconferencing to reduce international travel costs.
"We believe that applying this combination of activities consistently over time is the best way to build long-term shareholder value, including a reversal of the reduced profit outturn in 2005," said Mr Orane.
