As Caribbean Flavours and Fragrances Limited (CFF) begins to feel the full effects of the novel coronavirus pandemic, the company is looking to a possible acquisition in the near term as it continues to scale itself for the export market.
This was revealed by Chief Financial Officer (CFO) Ian Kelly at the company’s recently held annual general meeting.
CFF’s six months revenue up to June has remained flat at $301.30 million while its net profit declined by five per cent to $41.23 million. CFF is a manufacturer of various flavours used by several large manufacturing companies with their fragrances used by other small retailers.
“If you look on the balance sheet, we have enough funding from our current assets for an acquisition if the opportunity arises. We are always looking for the acquisition of companies that will fit perfectly in CFF. As soon as we see it, I’m sure my audit committee and chairman of the board will give the final go ahead for us to take that leap of faith,” stated the assured CFO.
CFF’s current asset base rose by eight per cent to $570.03 million with its cash and receivables balance standing at $40.11 million and $112.83 million, respectively. The company also remains debt free at the end of June with its current liabilities only standing at $56.71 million. CFF is a subsidiary of Derrimon Trading Company Limited which acquired its initial stake in the business in August 2014.
When asked about the company’s plans to tackle the rising levels of inflation, Kelly explained that the company has had to carry more inventory to mitigate any possible disruptions in the business amid rising shipping and commodity costs. Shipping costs have jumped from US$4,000 to more than US$22,000 over the last year.
“We have to be using our different connections and strategies in order to curb expenses. Many of the increased logistics costs cannot be passed onto the consumer because of the erratic price movements we would have seen. Because of the demand from the different markets, it impacts when we get our products. We have to be carrying more inventory to not put our customers at a disadvantage,” noted Kelly.