CPJ seeks J$426m from share offer

//, News//CPJ seeks J$426m from share offer

The company was in cashflow deficit at the end of December, its prospectus shows.

The 220 million unit offer at J$2 a share opens Friday and closes on July 15.

“The company seeks to raise $425.75 million for expansion and general working capital purposes,” stated the company prospectus posted to the Jamaica Stock Exchange (JSE).

The funds will finance the expansion of CPJ’s existing agro-processing facilities and establish a dedicated warehouse by March 2012; launch an additional CPJ Market retail outlet in Kingston by September 2012; expand CPJ’s technical chemical sales and services into commercial swimming pool systems among other things by July 2011; launch of a new distribution arm in St Lucia – by December 2012 pending due diligence approval; acquisition of new international wine and spirit brands; and general working capital support.

The company said it plans to pay dividends in US dollars at a rate of 25 per cent of profits.

CPJ, which was founded by chairman Mark Hart and chief executive officer Thomas Tyler, services the hospitality industry and general retail market as an integrated food service distributor. Its market and product divisions include food and dry goods, wines, beer and spirits, ready to drink beverage systems, chemicals, eggs and CPJ Market.

Fully subscribed

Provided that the offer is fully subscribed, Sportswear Producers Limited and Wave Trading Limited, both ultimately controlled by the Harts, will own 80 per cent of CPJ; the public will own 13 per cent and remaining eight per cent will be held by staff and directors.

CPJ made six-month after-tax profit of some US$526,910 ending December 2010 or 40 times higher than year earlier levels.

However it recorded a negative cashflow of US$157,130 due to a US$3 million rise in receivables and a US$1 million bank overdraft.

Contextually, CPJ made US$1.19 million of profit for the year ending June 30, 2010, its best showing in the past five years.

The company’s net current assets grew steadily over the five year review period from US$4 million in 2006 to US$10.6 million in 2010.

It has US$2.1 million in shareholder equity at December 2010.

CPJ was founded in 1994, with five employees and a single 16,000 square foot warehouse. Today it has over 200 employees with a 120,000 square foot warehouse.

The offer, for which Mayberry Investments is lead arranger, makes 142.56 million shares available to the public at J$2 per share, while the rest is reserved for staff and directors at prices ranging from 10 cents to J$1.80.

CPJ is the second company to be taken public by the Harts. Cargo Handlers, which is run by Mark Hart and chaired by father Tony, went public last December.


Jamaica Gleaner

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