Having divorced itself from its loss-making food group, Jamaica Producers has rebounded and is reporting half-year profits of $100 million - just over half of which was booked in the last three months ending June 30.

Serious Foods Group, a drag on the company for more than a year, was placed in administration in the United Kingdom earlier this year.

JP gave up some billions in annual revenue as a result but with advantage to its bottom line.

Now, instead of the $6 billion in six-month turnover a year ago that resulted in losses of $635 million, JP reported revenue of $2.8 billion in the first half of 2009, but had $100.2 million of profit to show for it.

For the second quarter, JP was $55 million in the black, compared to $377 in the red in the June quarter of 2008.

"The group's 2009 second quarter performance benefited from our decision to exit the Serious Food Group earlier this year," said JP Chairman Charles Johnston in a statement accompanying the accounts released in his report on the company's financial statement released Tuesday.

Stock price climbs

The company's stock climbed 98 cents, or 6.95 per cent, to close at $15.09 on the stock market on the same day.

In January, JP decided to place the United Kingdom-based Serious Foods in administration, effectively retiring some 70 per cent of its business, measured in sales revenue, to cauterise "mounting cash losses", the company said.

Serious Foods, the company said, had become the victim of increased raw material commodity costs, which it was unable to pass on to its customers, and was forced to write to its sinking bottom line.

In the hands of the administrators are Serious Foods subsidiaries Sunjuice Limited, Serious Food Distribution Limited, Serious Soup Limited, and Simply Organic Limited, plus the brands they own.

Serious Desserts Limited was sold previously in 2008.

With the exit from Serious Foods, Jamaica Producers' sole UK presence reverted to its shipping logistics company, Ram, which specialises in handling cargo to the Caribbean.

But it also continues to operate in the prepared foods market in Europe, under its JP Europe Division, whose business includes the production and marketing of natural food and drink in The Netherlands as well as the logistics operations in the UK.

Logistics redefined

For the first half of the year, JP Europe made pre-tax profit of $94 million on $2.2 billion of revenues, compared to a loss last year.

"In the context of a weak economic outlook for The Netherlands and neighbouring countries, our major focus for this business has been on achieving improved operating efficiencies," Johnston said.

For the quarter the logistics business also reflected a turnaround, JP said, having transitioned away from the transport of bananas towards a full service operation serving the entire Caribbean.

JP Tropical Foods, the company in which JP's growing snack business is reposited, also turned a HY pre-tax profit of $23 million.

"The business experienced strong sales growth of banana-based products in Jamaica fresh fruit and St Mary's banana chips," JP said.

During the June quarter, JP Tropical implemented a series of initiatives to diversify its product base that now includes barbecue flavoured banana and cassava chips.

The company is also in the early stages of introducing its snack offerings into the Dominican Republic and the United States.

business@gleanerjm.com