Ashford W. Meikle, Staff Reporter
ALMOST THREE thousand shareholders of major coffee processors, Salada Foods Jamaica Limited, will not have the satisfaction of cashing a dividend cheque this year since the company will not be making a dividend payment. The chairman, Bevon Francis, formally communicated this at the company's annual general meeting (AGM) yesterday at the Hilton Hotel in New Kingston.
"The directors do not recommend that a dividend be paid this year," said Mr. Morris. Of the thirty-three companies on the Jamaica Stock Exchange, Salada "holds the distinction of never paying a dividend," according to a shareholder who was present at the AGM.
Another shareholder, Ralph Chen, complained, "Independent shareholders are an endangered species in this meeting, indicative of the low profile of the company."
GETTING PROGRESSIVELY STRONG
Mr. Francis defended the Salada's decision not to make a dividend payout. "The directors of the company have felt it necessary for the company to gain strength. I think the company is getting progressively strong over time."
For its financial year to September 30, 2004, Salada earned net profit of $24 million on sales of $249 million. Revenue and net profit registered increases of 15 and 41 per cent, respectively. The company's earning per shares recorded a 41 per cent increase, to $2.32.
The company's six-month performance (to March 31) has remained relatively flat, with revenues growing by 11 per cent, to $69 million. Net profit attributable to shareholders went up by a little under nine per cent, to $7.7 million, while its EPS increased by 8.5 per cent, to a little over 75 per cent.
Emoluments for the seven directors saw a 55 per cent increase in their fees, which jumped to almost quarter million dollars, compared to the $135,000 paid in 2003.
At yesterday's AGM, shareholders questioned the company's operational efficiency, noting that Salada's low turnover indicated that it was not benefiting from economies of scale. "We have not been actively pursing ISO certification in terms of ISO 9000. We believe there are things in the business we need to do more efficiently," said Mr. Francis. Salada, he said, "has not in a positive way sought to attain ISO certification."
NEED TO RESTRUCTURE
Mr. Francis acknowledged the need for the company to diversify its operations. "Certainly in the future, the protection which coffee enjoys will be dismantled. So we need to restructure." However, the directors are yet to decide on a specific area.
"In terms of where the company goes from here - specifically we haven't come up with a project. Once we decide on expansion - then we'll decide."
Salada is the largest coffee processing company in Jamaica with product lines such as Mountain Peak and Shirriff Instant Coffee.
