Caribbean Flavours and Fragrance’s Profits Up for FY 2023

• Buoyed by robust revenue grow (+16.7% or $128.58Mn), Caribbean Flavours and Fragrance Limited (CFF) reported a 115.3% year over year rise in net profit to $132.82Mn (EPS: $0.15) for FY 2023.

• The improved revenues outturn was driven by the company's continued efforts to refine its sales approach strategy, as it focused on closing new business deals, introducing new products to its various partners, and deepening its sales strategies in the markets that it serves.

• Notably, the rise in revenues outweighed the 6.0% expansion in cost of sales, resulting in a 41.8% (or $95.78Mn) increase in gross profit. This growth in gross profit translated to a 6.40 percentage points increase to 36.1% on the back of better management of its inventories, efficiency gains from the manufacturing processes, and the change in its product mix. CFF successfully launched its new ingredients portfolio which provides new emulsifiers and enzymes poised to revolutionise the quality, texture, shape, and visual appeal of baked products while extending their shelf life in the market.

• However, the company’s operating and administrative costs increased by 16.69% (or $25.64Mn) as the cost of attracting new talent, and other professional fees relating to product development rose.

• CFF aims to continue offering new solutions to the market while refining its current product offerings and solutions through research and development. It anticipates that through these initiatives it will gain greater acceptance in local and overseas markets.

• CFF’s stock price has appreciated by 1.2% since the start of the year and closed Thursday’s trading session at a price of $1.69 per share. At this price, the stock trades at a P/E ratio of 16.9x earnings, which is below the Junior Market Manufacturing Sector average of 25.4x.

(Sources: Company Financials & NCBCM Research)