CEO of pharmaceutical distribution company, RA Williams Distributors, Audley Reid says the company is weighing its options for additional capital to fund its expansion, including a possible initial public offer (IPO).

RA Williams is a family-owned and operated drug distribution company based in Spanish Town, St Catherine.

The company distributes pharmaceuticals and over-the-counter drugs to hospitals, pharmacies and medical offices across the island. 

Speaking on Taking Stock with Kalilah Reynolds, Reid said that they supply all of the country’s major public and private hospitals and over 500 pharmacies.

Audley Reid, CEO of RA Williams Distributors

The company recently revealed that it earned JM$1 billion (US$6.6 million) in revenue for their financial year ending April 30, 2022.

According to Reid, 10% of those earnings were profits.

Assessing options

Reid said RA Williams is looking to grow further and increase their revenues.

“Our business is growing rapidly and the key to growth at a high level and pace in the pharmaceutical industry is capital. A pharmaceutical business is capital intensive.  It requires an enormous amount of money to continue to fuel growth,” he said.

To that end, the CEO said that the company is assessing its financial position and evaluating what would be the best way to go forward in raising capital.

“Nothing is off the cards.  We will determine in due course if we need to raise a bond, consider private equity investment or go to market,” he said. 

“We are looking at our growth rate and our growth pace and we’re trying to determine, ‘do we need additional capital right now or later on and if we will, how much?’” he added.

According to Reid, the early stages of the COVID-19 pandemic impacted them severely and highlighted the need for them to have access to capital. He noted that the company more than doubled its inventory during the pandemic to offset global supply chain and logistics issues. 

This in turn has led to the company facing some storage issues as it struggles to find space to house its massive inventory. However, Reid said this will be solved in short order as they have secured 20,000 square feet of storage space.

Despite the challenges it faced as a result of the pandemic, RA Williams was still able to post good financial results.

“Generally, our numbers have held steady over the years. We tend to hold our gross profit at about 45% and net profit anywhere between 10-12%, sometimes as high as 15%,” he said.

Company history

Reid noted that when the company started operations in 2012, it made approximately $12 million in revenue, which has now grown to $1 billion in its 10th year. 

He added that roughly 10% of that billion-dollar revenue is net profit.

The CEO said that the business’s success is attributable to a few things such as the expertise and experience of its Board, which includes veterans in the pharmaceutical, manufacturing and distribution and financial industries.

He said that his family’s background and training in pharmaceutics also provides a massive upper hand.

“The key is our pharmaceutical knowledge, being trained pharmacists. We knew and had good insight into what the market gaps were and what areas to fill that would give us a foothold,” he said.

He also credits equity partners Danny Williams, who is the founder of the country’s first Jamaican-owned life insurance company, Life of Jamaica, now Sagicor Life Jamaica and his son-in-law, John Bailey as major players in the company’s success.

Reid said that Williams and Bailey each own a 25% stake in the company, while his family retains a 50% stake.

He said that in addition to the capital, both men have provided invaluable guidance and mentorship.

WATCH THE INTERVIEW HERE