RATING DRIVERS
Supporting Factors
- Current portfolio of products and wide distribution reach across Jamaica underpin a strong market position
- History of strong and stable financial performance characterized by healthy profitability and adequate debt protection metrics
- Integrated businesses and quality management practices drive sustainability
- Good corporate governance practices supported by a competent management team
Constraining Factors
- Downside risks associated with significant sovereign risk exposure to Jamaica, coupled with uncertainties in the global economic environment are likely to impact Seprod’s earnings
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the ratings and/or Outlook include:
- An improvement in the GOJ’s credit rating over the next 12-15 months
- Sustained improvement in profitability by 10% or more annually for the next 2 years
- Lowering of the Group’s debt to TNW ratio to below 1.5 times
Factors that could, individually or collectively, lead to a lowering of the ratings and/or Outlook include:
- A deterioration in the GOJ’s credit rating over the next 12-15 months
- A fall in the Group’s interest cover and effective DSCR to below 2.5 times and 1.5 times respectively, sustained for 2 years
COMPANY BACKGROUND
Seprod and its Subsidiaries (Seprod or the Group) is a food manufacturing and distribution entity, whose origination dates back to 1930 with the formation of the Jamaica Coconut Producers Association which was subsequently incorporated in 1940. In 1944, the Jamaica Coconut Producers Association acquired Soap and Edible Products Limited, which was renamed Seprod Limited in 1956. Throughout its history, Seprod has grown its business and solidified its footprint in Jamaica via mergers and acquisitions in various consumer goods segments.
Seprod has grown to be one of the largest food companies in the English-speaking Caribbean, employing over 1,750 people, with its brands represented in 21 territories around the globe. The Group’s holding company was publicly listed on the Jamaica Stock Exchange (JSE) in 1985. As at March 2021, Seprod’s single largest shareholder was Musson (Jamaica) Limited, owning 48.94% of the Company’s outstanding shares through a combination of its direct 31.87% holding as well as the 17.07% held by its wholly owned subsidiary, Facey Group Limited.
The Group’s principal operating activities are categorized into 3 main pillars:- (i) Dairy, (ii) Distribution and (iii) Ingredients. Seprod’s operations now include 7 wholly owned subsidiaries and 1 joint venture located in Jamaica, St. Lucia, Barbados, Trinidad and Tobago (T&T) and the Dominican Republic. Seprod’s portfolio of manufactured products spans 12 categories ranging across consumer food and household items, flour, packaged retail sugar, beverages, snacks, oils and fats, a range of dairy products, under brands such as Betty, Chiffon, Pronto, Gold Seal, Butterkist, Serge, Golden Grove, Miracle, Brunswick, Supligen and Swizzle, among others. As at December 2020, the Group’s total assets stood at J $27.7 billion and for the year ended December 2020 total operating revenue was J $37.7 billion.
Analytical Contacts:
Kathryn Budhooram
Tel: 1-868-627-8879 Ext. 226
E-mail: kbudhooram@caricris.com
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
E-mail: khamlet@caricris.com
Website: www.caricris.com
E-mail: info@caricris.com
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