Medical Disposables reorganises, triggers succession plan
MEDICAL DISPOSABLES & Supplies Limited, MDS, bled $7 million in the June quarter, accelerating a decline in earnings that began setting in even before the pandemic.
The family-operated company is now going through a reorganisation aimed at getting back on a growth path, and has activated its succession plan that passes the leadership baton to the next generation in a matter of weeks.
Effective November 1, General Manager Kurt Boothe, who has worked with the company since 2006, will succeed his mother, Myrtis Boothe, as boss of the operation.
Myrtis is giving up her position as managing director but will retain an executive role in the company that she founded over two decades ago. She will serve as a resource to the current management team and oversee the further development of MDS’s medical division, Kurt Boothe said.
“She has critical strengths in this area, as this is where it all started,” Boothe said of his mother, a career nurse who started the company selling medical supplies out of her car trunk after resigning as sales manager from another medical supplies company.
“The medical division is at the core competitive competence of the company and since it was there from birth, we can say that it is in our DNA,” he said.
Myrtis will remain an executive director on the company’s board, which is chaired by her husband, Winston. Kurt and his sister, Nikeisha Boothe, also sit on the board.
MDS is primarily in the business of distributing prescription pharmaceuticals and disposable hospital supplies, but it also sells consumer products for personal care and the home.
At year ending March 2020, the company recorded modest growth
in revenue to $2.48 billion, but its profits decelerated dramatically from a high of $112 million reached the year before to a new low of $34 million.
Revenue subsequently slipped in the first quarter, during the height of Jamaica’s lockdown against the coronavirus, feeding into the Q1 profit bleed. The company spun from a profit of $18 million in the April-June period last year to a loss of $7 million this period.
The reforms at the company, said Boothe, have been under way since last year, when the distribution company was split into three units – medical, pharmaceutical and consumer – each with a division head charged with expanding sales channels and deepening market penetration.
MDS was formed in November 1998 and went public in late 2013. Since its market début, the company has tripled its annual sales from $783 million to $2.5 billion. Its earnings in the past fiscal year was the lowest outturn since MDS began trading on the stock market.
The company, however, says it sees opportunities to grow its way out, notwithstanding the challenges it faces, which includes the loss of long-time financial controller Janice Pitter, as well as the chief accountant and operations manager, to better job offers.
It was the vacancies that triggered MDS’s succession plan, Boothe said.
“We lost good talent with those departures, but it also gave us an opportunity to look at things differently and double down on building out the divisions and staffing it with a team that could drive growth,” he told the
Financial Gleaner.
Last year, the company hired Sheldon Rose as operations manager, and Louis Manning and Antoinette McDonald as divisional managers, while Raymond Ernandez, the former financial controller at the Shipping Association of Jamaica, was brought on as chief financial officer in March of this year.
With this fresh team, the company has set a three-year time horizon to hit certain targets, Boothe said, but declined to give specifics.
Their immediate challenge is manoeuvring the market compression caused by the spread of the coronavirus and the measures to contain it.
“Everything for the first quarter was COVID-19. We were confronted by business closures, lockdowns and slowdowns. That had to do with the pharmacies, doctors’ offices, and even the hospitals themselves, since they were only dealing with mostly emergencies,” the CEO-designate said.
The expansion of the consumer division also drove up costs for the company from new staff hires, product lines and distribution channels. MDS Consumer supplies beauty and personal care products, home and laundry products, along with mosquito repellents, cleaning products, confectioneries and snacks, among other items, some of which are not recognisable brands.
“The first phase was to get in the brands and use channels such as wholesales and so on to distribute. The next phase is to add the marketing,” said Boothe.
“We think the tangible results will be seen going forward. Already, some of the areas of slippage in efficiency have been stabilised and arrested,” he said.