Derrimon explores new growth opportunities
LESS THAN a year after making its first foreign acquisition, distribution company Derrimon Trading already has its feelers out for more growth opportunities.
The mood inside Derrimon Trading has been one of optimism over the past year, having raised US$3.5 billion through an additional public offering in January, which was used for the acquisition of grocery business FoodSaver New York, expand Select Grocers’ retail operation in Clarendon, as well as enhancements to the Delect food brand and product line.
The optimism lingers despite the challenges brought on by COVID-19, Chairman and CEO Derrick Cotterell told shareholders during the company’s annual general meeting on Wednesday.
With a new business bagged, Derrimon Trading is looking towards organic growth moving into 2022. But the company also has its feelers out for partnerships, or possibly more acquisitions.
“We expect to grow organically, and we expect to grow through other means. It’s too early to speak on those stuff, but we see opportunities and as usual, we are preparing ourselves to take advantage of those opportunities as they arise,” Cotterell said.
Derrimon Group will continue to focus on growing the retail segment of the business, as well as expanding the overseas operation. Its retail segment comprises Sampar’s Cash and Carry, Select Grocers and FoodSaver New York. The group’s other businesses are Woodcats and Caribbean Flavours and Fragrances, both domiciled in Jamaica.
“We are now doing the construction of what will be our biggest store. We are putting the finishing touches on Select Grocers in May Pen, we were hoping to open it for this year but with the supply chain issues, it won’t be open until next year,” Cotterell said.
Select Grocers May Pen is roughly 60 per cent complete.
As for the expansion of the newly acquired FoodSaver New York, Cotterell said the company has done much work in moving the business from a ‘mom-and-pop’ business to a corporate operation and is bullish on building out the food store to serve the targeted diaspora market as well as new customers.
“The diaspora has 17 times the spending power of Jamaica, and so we are very happy to participate in this market. Our ambition is not just for the diaspora; our ambitions are bigger, but it takes times,” he added.
At the close of the half-year ending June 2021, Derrimon had cash resources of $531 million, which its could use to part-fund its growth opportunities. Earnings of the company grew 47 per cent year-over-year to $125 million, while revenue stood at $4.04 billion, reflecting an increase of 36 per cent over the comparative period in 2020.
Amid expansion, Derrimon Trading is also looking at ways to improve efficiencies across the group. One avenue it will explore is consolidation.
“Our board will look at the business and consider where it is best to keep shareholder value,” Derrimon’s Chief Financial Officer Ian Kelly said.