Home' Trinidad and Tobago Guardian : March 4th 2016 Contents A56
Guardian www.guardian.co.tt Friday, March 4, 2016
In 2015, the GraceKennedy Group experienced many successes and some challenges. We
remained loyal to our strategic roadmap, driving current performance while ensuring that we made
the right decisions to deliver on our long-term vision.
Group revenue for 2015 was J$79.74 billion, representing an increase of 12.6% or J$8.90 billion
over 2014 (J$70.84 billion). Net profit attributable to the shareholders of the Company was J$2.76
billion for 2015 compared with J$3.29 billion for 2014. Earnings per share was J$8.35 in 2015
compared with J$9.90 in 2014. Performance was impacted by costs associated with the integration
of the US foods operations through GraceKennedy Foods USA LLC, a non-recurring non-cash credit
in 2014 related to post employment obligations under IAS19, lower foreign exchange gains,
additional finance costs and an increase in the taxation charge.
Shareholders' equity increased by 4.1% or J$1.51 billion moving from J$36.53 billion in 2014 to
J$38.05 billion in 2015. Total assets grew by 6.7% or J$6.83 billion from J$101.86 billion in 2014
to J$108.69 billion in 2015. Dividends totaling J$2.48 per share were paid in 2015 compared with
J$2.33 in 2014, an increase of 6.4%. At the end of 2015, the GraceKennedy stock price closed at
J$81.25, a 33.1% increase over the prior year.
GraceKennedy divested its 58.1% interest in Hardware & Lumber at a price of J$18.50 per share on
December 30, 2015. This is in keeping with our goal of increasing shareholder value by focusing on
the foods business locally and internationally and financial services in the Caribbean region.
The major areas of focus for the Group during 2015 were the continued integration and optimization
of our US foods operations, strengthening our Jamaican businesses, growing our international
presence, specifically in Western Africa, Continental Europe and on both the East and West Coasts
of North America, expanding our regional financial presence and prioritizing our employees and
During 2015 we took significant steps to rationalize and optimize the operating systems and
organizational structure of GraceKennedy Foods USA LLC, from which we have started to reap the
benefits through efficiency gains as well as improvements in logistics and controls. These steps
along with planned infrastructure and brand development investments will place the company firmly
on a path to achieving sustainable profitability for 2016 and beyond. We remain confident that our
entry into the Hispanic food and beverage market, one of the fastest growing segments in the United
States, represents an exciting opportunity for future growth. We continue to invest in long-term
strategic relationships, partnering with American beverage giants, AriZona, to distribute Grace
beverages in select markets in the United States. This partnership, which started in January of
2015, has already resulted in improved sales of beverages in the US market. There is the potential
to expand the parameters of the partnership which will bring even more benefits to the Grace brand.
A core part of our strategy in the European foods market is to increase listings in key markets and
we made great strides in this area. The foods business achieved several new listings including at
Albert Heijn, the number one supermarket chain in Holland. At our UK factory, we transitioned to
Jamaican pepper in the production of our hot sauce. This will be a source of continued growth for
our pepper production facility, Grace Agro Processors (GAP) in Jamaica. GraceKennedy Ghana
Limited continues to maintain the visibility of the Grace brand in Africa and will be the foundation
from which we will nurture our relationship with this continent. Our Nigerian company, GK Foods
Limited, launched Nurishment drink and Dunn's River dry spices in Nigeria. The company will be
focused on building these brands over 2016.
GraceKennedy Ontario continues to perform well and is leading our efforts to expand into the
mainstream foods market. The company has introduced several new products which have
transitioned from the ethnic to the mainstream food aisles. Grace Coconut Water is now the number
one coconut water brand in Western Canada. We continue to work on building the coconut category
in this market with the aim of becoming one of the top brands of choice.
Our foods business in Jamaica showed strong results, surpassing prior year's revenue and profit.
The Jamaican foods distribution business experienced significant growth through a continued focus
on re-engaging our consumers through a number of promotional activities. Our main promotional
activity for 2015, "Grace on the Move", was very successful. World Brands Services, one of our
foods distribution businesses, continued to deliver quality products while adding value and
expanding markets for GraceKennedy's principals. This business is expected to show further growth
as we look for opportunities to deliver products that meet the needs of our Jamaican customers.
Hi-Lo Food Stores, our supermarket chain in Jamaica, delivered growth in profit. Profit margins were
higher than that of 2014 due to improvement in product mix and assortment and the implementation
of sustainable cost containment measures. Arising from our on-going renovation exercise, the
Manor Park and Barbican branches have seen strong revenue growth and efficiency gains. We
continue to invest in the Hi-Lo chain as we strengthen our presence in the Jamaican market.
Our manufacturing operations performed exceptionally well due to strong demand from both our
Jamaican and overseas markets, efficiency gains, yield improvements and favorable commodity
prices. Grace Agro Processors (GAP), the company's processing plant in Hounslow, St Elizabeth,
Jamaica has been performing well despite challenges associated with the severe drought last year.
It is expected that GAP's export business will grow significantly, which would directly benefit local
farmers with whom GAP partners.
During 2016 we will continue to focus on our manufacturing and distribution portfolios with new and
enhanced products, as well as the re-launch and refreshing of some of our Grace and Grace owned
brands. We are committed to improving our efficiencies, and on creating strong brand and product
awareness, through strategic leadership and an engaged and motivated team.
The GraceKennedy Financial Group (GKFG) had a good year with strong growth in revenue and profit.
The Insurance segment reported growth in revenue and profit, primarily attributable to the
performance of GK General Insurance Company and Allied Insurance Brokers. In 2015,
GraceKennedy rebranded Jamaica International Insurance Company Limited (JIIC) as GK General
Insurance Company Limited and First Global Insurance Brokers Limited in Turks and Caicos as GK
Insurance Brokers Limited. In July 2015, GK General Insurance Company officially launched its
internet-based solution, GKGOnline, which allows customers to purchase motor insurance via the
Internet. The portal has been enthusiastically received by our customers and provides the foundation
for future expansion in the Caribbean region.
First Global Bank (FGB) continued to pursue a strategy focused on convenience and technology with
the launch of its Video Teller Machines (VTM) and mobile banking app in the latter part of 2015. Video
Teller Machines, the first of its kind in the Caribbean region, is an interactive video technology that
allows a live teller to interact with customers using video chat. The mobile banking product was
launched with over 1,000 downloads in the first month.
GraceKennedy Money Services (GKMS) now offers remittance services in 11 markets, after its
recent entry in the Cayman Islands in November 2015 and Turks & Caicos, in February 2016. This
is a major milestone for the Group as we continue to expand our money services in the English
speaking Caribbean and strengthen our relationship with Western Union, with whom we celebrated
25 years of partnership in 2015. In line with our strategy to deliver innovative and convenient
solutions GKMS is expected to officially launch an electronic service in 2016 that will allow for
payment of transactions using cellular phones. We are very excited about the opportunities that this
will present for the Group.
GraceKennedy partnered with the Inter-Secondary Schools Sports Association (ISSA) to form a
company called Greenfield Media Productions Limited. This will enable the management of media
rights for ISSA's entire portfolio of sporting events and the promotion of brand Jamaica's sporting
accomplishments to the diaspora and the world.
Our commitment to excellence was again recognized at the Jamaica Stock Exchange's Best Practice
Awards where we received the first place award for Corporate Disclosure and Investor Relations
(Main Market) and tied as first runner-up for the JSE/PSOJ Best Practice Award for Corporate
The GraceKennedy and Grace and Staff Community Development Foundations continue to positively
impact our communities and exemplify our commitment to "We Care" particularly in the areas of
community development, education, sports and environmental awareness. The Grace & Staff
Foundation supports nearly 400 students that are pursuing studies at the high school and tertiary
level, and over 400 students registered across the five (5) Homework Centres. The Foundation also
stages its Annual 5K Education Run which is the flagship event that is used to raise funds and
awareness of the educational needs of our students. The Foundation received the 2015
Environmental Health Foundation's Award for contribution to social wellness.
We are optimistic about the prospects for 2016 and beyond, as we strengthen the foundation for
future growth, increase our global footprint and develop our people. Continued customer
engagement remains a top priority going forward and this will go a far way in transforming
GraceKennedy into a more marketing led organization. We remain focused on execution of our
strategy and growing market share in our core businesses.
We would like to recognize and thank our employees whose commitment, talent, innovation and
hard work continue to guide the achievement of our shared goals. We would also like to recognise
and thank you our shareholders, for your investment and continued confidence as we work towards
our goal of becoming a Global Consumer Group. To our consumers and customers, thank you for
your loyal support.
As we work to achieve our goals, we remain grounded in and guided by our values of HONESTY,
INTEGRITY and TRUST.
Group Chief Executive Officer
February 29, 2016
HONESTY | INTEGRITY | TRUST
SUMMARY OF AUDITED RESULTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER, 2015
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