Chairman of the Jamaican Teas Group, John Jackson has targeted the first quarter of 2022 for the issuance of shares in the company’s spin off manufacturing entity, Caribbean Dream Food Limited.

Jamaican Teas recently announced plans to create that company, a decision which Jackson said was influenced by current and future investors. He said some aren’t liking the mixture of products and services that the group currently offers and would rather back a 100% manufacturing arm.

Jamaican Teas owns several subsidiaries not in the production of teas and other products that the company manufactures. They are a significant shareholder in QWI Investments and are also involved in real estate through the ownership of several properties and a small supermarket in Kingston.

Speaking on Taking Stock with Kalilah Reynolds, Jackson said that to please investors, Caribbean Dream Food would be primarily focused on the manufacturing aspect of the group, including the production of teas and a few other household products. 

Chairman of Jamaican Teas and QWI Investments, John Jackson

“The realty is that we’ve been approached by a number of persons who’d like to be involved in the group in a significant way but have expressed reservations or dislike for the conglomerate that we now have and would rather something that is purely in the tea business as opposed to the number of things we’re in currently,” he added.

He said he expects that the spin off will take place quickly after shareholders approve. They are set to vote on the matter during the company’s upcoming general meetings on October 27.  

The Chairman said he’s not expecting shareholders to make any other decision than approve the spin off, noting that the market has already been reacting positively to the news. He said investors have been buying Jam Teas stock in increasing numbers and at increased prices. 

Jam Teas’ stock has increased some 115% year to date, moving from $1.99 on January 4, 2021 to $4.22 on October 7. On the day it announced the spin off, the price of the stock was $3.79.

“I believe that’s a subtle message that they like what is to come. I think the interest is there for a number of reasons because we’ve done pretty well as a company this year and the stock price has more than doubled since the start of this year and has actually tripled since we had the stock split so I get the impression investors like what we have done and they like the feeling that we are sensitive to investor’s desires,” he reasoned.

Jackson said the new company won’t require a lot of capital as it will operate at the Belmont plant which will continue to be owned by Jam Teas. He said Jam Teas will also own about 70%-75% of the spin off company. A General Manager will also be named in the coming days for the new subsidiary to begin duties on November 1.

“The inventory and machinery will be passed over to the company and what initially will happen is that shares will be given or debt owed to Jam Teas so  there’ll be very little funds needed for the manufacturing arm and whatever funds are needed will be provided upfront by Jam Teas. When the shares are sold it’s likely to be Jam Teas selling shares,” he explained.

Jackson said the decision to sell shares will provide Jamaican Teas with inflows of cash for further development or to be used in the acquisition of entities that may become available for the group.

In the meantime, Jackson said he expects the group to increase sales and profits in the upcoming year, despite the challenges with high shipping costs brought on by the pandemic. 

He said the company has been finding ways to mitigate the impact, and added that plans are also still on the cards to transition the company to the main market of the Jamaica Stock Exchange (JSE) in the future. He said while he doesn’t envision a graduation within the next 12 months, the situation remains fluid and remains dependent on expansion and acquisitions.

New episodes of Taking Stock with Kalilah Reynolds premiere Tuesdays at 8pm on YouTube and kalilahreynolds.com 

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