AUGUST 16, 2024
PRESS RELEASE
FOR IMMEDIATE RELEASE
Derrimon Trading Reports Mixed Results With Strong Retail Growth And Cost Management In H1 2024
(Kingston, Jamaica) Derrimon Trading Company Limited (DTL), a leader in wholesale distribution, retail, and manufacturing in Jamaica, has released its unaudited financial results for the six months ended June 30, 2024. The results reflect a challenging operating environment but also demonstrate the company’s resilience and strategic focus.
The Group generated revenue of J$7.81 billion for the first half of 2024, a decrease of 17.79% compared to J$9.50 billion for the same period in 2023. This decline primarily reflects no contribution in revenue since March 22, 2024 from both Marnock LLC and Marnock Retail LLC in New York due to roof damage at the location. Despite the revenue contraction, DTL’s core segments demonstrated growth. The retail and wholesale segment, including Sampars and Select Grocers, achieved a robust 20.05% increase in revenue, driven by enhanced customer experience arising from the implementation of a new IT platform.
Group EBITDA rose by 24.45% year-over-year to J$1.15 billion, underscoring the company’s success in managing costs amidst economic headwinds. Profit before tax for the period stood at J$136.84 million, a decline of 40.27% compared to 2023. Consolidated net profit for the period was J$120.84 million and both are heavily and negatively impacted by the temporary closure of Marnock LLC and Marnock Retail. Total assets increased to J$17.54 billion, and have been influenced by deliberate strategies on inventory as the Group is positioned for future growth. The company’s market capitalization also increased to J$9.93 billion as DTL’s stock price closed at J$2.19, an 18.38% year-to-date increase.
“DTL’s focus on its core operations delivered positive results despite challenges in other areas. The company’s proprietary brands, including Delect, Refresh, Gentle, and Spicy Hill, continue to gain market share. The distribution segment recorded a 7.99% increase in revenue as these brands, along with core distribution products, gained traction,” said Derrick Cotterell, Group Chairman and CEO.
He continued, “The wholesale and retail segment, which includes the company’s Sampars outlets, saw a significant 20.05% revenue growth. This was bolstered by enhanced sales performance and the successful integration of a new IT platform that improved purchasing decisions and customer engagement.”
While Caribbean Flavours & Fragrances Limited (CFF) and Woodcats International recorded revenue growth, Arosa Limited encountered difficulties due to equipment failures and a downturn in the tourism sector. Additionally, the temporary closure of the New York-based Marnock operations has had an adverse impact. The affected businesses are expected to reopen by October 2024.
The Group implemented stringent cost-control measures, resulting in a 10.55% reduction in consolidated operating expenses for Q2 2024. This contributed to a 6.50% increase in operating profit, which reached J$517.38 million.
The company’s commitment to enhancing operational efficiency was also evident in its core activities. Gross profit for the second quarter increased by 72.07% to J$827.45 million, driven by better pricing strategies and improved inventory management.
Chairman Derrick Cotterell expressed confidence in the Group’s long-term strategy, “Derrimon remains focused on strategic growth, with plans to expand its proprietary brands and retail footprint while continuing to drive operational efficiency. We are optimistic about the reopening of the Marnock businesses in New York and are currently exploring opportunities to mitigate risks associated with supply chain disruptions and currency fluctuations.Despite a challenging first half, our core segments have performed admirably, and we remain committed to delivering value for our shareholders. Our focus on efficiency, innovation, and growth positions us well for the future.”
The Group’s Annual General Meeting is scheduled for September 11, 2024, at the Terra Nova Hotel, Kingston, and will also be available virtually via Facebook.
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