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GK hits $100b milestone

Published:Wednesday | March 4, 2020 | 12:23 AMKarena Bennett/Business Reporter
Don Wehby, Group CEO of GraceKennedy Limited.
Don Wehby, Group CEO of GraceKennedy Limited.

GraceKennedy has hit and surpassed its revenue target of $100 billion, a goal that was initially aligned with its centenary.

The company closed its 2019 financial year with a top-line gain of nearly six per cent across its financial and food operations, which pushed revenue from $97.5 billion to just over $103 billion.

The growth in revenue was attributed to increased earnings in all the conglomerate’s business segments, which include food trading, banking and investment, insurance and money services.

GraceKennedy’s target of $100 billion in revenue was originally expected to be twinned with its 100th year anniversary in 2022.

“We are proud of what we were able to accomplish in 2019 … we expect 2020 to be a successful year for the company,” Group CEO Don Wehby said in a statement released with the conglomerate’s year-end earnings report.

GraceKennedy first disclosed $100-billion ambition in 2018 when it called in a foreign consultant to liven and tighten up the business. GraceKennedy turned 96 that year.

The conglomerate hired the London Consulting Group to assist with a restructuring plan that resulted in the slashing of 70 jobs, a management reshuffle and the creation of new positions across the group.

It came in the midst of the company’s quest to grow via mergers and acquisitions, M&A. Two of its purchases were a 33.3 per cent stake in Gray’s Pepper Products Limited, one of Jamaica’s largest processors of seasonings and sauces, and 100 per cent ownership in distribution company Consumer Brands Limited.

Last year, GraceKennedy entered the life insurance market with partner Musson Jamaica, the two having formed a start-up called Canopy Insurance – which will see them initially taking on Sagicor Life Jamaica and Guardian Life in the group health insurance market; and this year, GK is in the process of deepening its footprint in the general insurance market through the takeover of Key Insurance, a transaction that is ongoing.

GK already acquired 15 per cent of Key for $111 million in December, just before the close of its fiscal year, and intends to grow its stake to no more than 80 per cent.

“Our focus for 2019 was on investing in our brands and expanding market share, and deploying digital and innovative solutions for our customers. The group continued to enhance its enterprise-wide risk management and compliance processes, and drive greater operational efficiencies,” Wehby said.

The company also relocated to its new headquarters at Harbour Street, Kingston, last year, which brought together the group’s executive office, the GK Financial Group Divisional Office and the GK Money Services Group, comprising the Western Union, Bill Express and FX Trader brands.

GK also pioneered its new Hi-Lo Express Supermarket concept at its headquarters building and is now planning to build out more express outlets, as well as its traditional stores under an expansion programme for the grocery chain that is still to be fully costed.

Under the expansion programme, the first store is projected to open in June, a 30,000-square foot outlet in Negril, being developed at a cost of US$1.5 million to US$2 million.

Among Jamaican companies with either preference stock or ordinary shares listed on the stock market, Jamaica Public Service Company and NCB Financial Group are the only others to surpass $100 billion of revenue. NCB’s revenue topped $170 billion last year due to its takeover of Guardian Holdings Limited of Trinidad.

Wehby will lead an investor call later today to discuss the conglomerate’s results.

karena.bennett@gleanerjm.com