2 months ago
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After posting strong performances in most of its operating segments, and for the group overall, GraceKennedy Limited is moving to address the continuing decline in profit from money services.
While the food division, which accounts for about 64 per cent of profit and grew at 22 per cent, banking and investments at 26 per cent and insurance at eight per cent, money services recorded a decline of 10 per cent per cent in pre-tax profits, largely because of reduced transaction activity and lower remittance flows in key markets.
The decline continued into the first quarter with a slippage of 6.3 per cent slip.
In his inaugural presentation to shareholders at the company’s annual general meeting, new Group CEO Frank James said GraceKennedy Money Services will now double down on digital remittances, while noting that GK’s digital business had grown by a robust 44 per cent last year.
“What that is doing is allowing persons to actually send [remittances] at even lower costs around the world, and it is taking significant costs out of our business as well,” James said.
But Jamaica is lagging behind the world, he noted.
Worldwide, the penetration for digital remittances is 50 per cent, but, for Jamaica, it’s only 20 per cent, James reported.
“That spells opportunity. There’s a long runway for the growth of digital remittances,” he said.
GraceKennedy is the exclusive agent for Western Union and is a top remittance service provider in Jamaica.
James noted that recent talk of taxes on remittances coming out of the United States, which is Jamaica’s top source market for money flows, is a matter of concern because anything that increases the cost of sending remittances would weigh on the business.
“It’s something that we are working on closely with Western Union; and, globally, all the remittance companies are watching this very closely and actively working on any solutions around that,” James said.
He added that the solution lies in digital transactions because such transactions can cost 30 to 40 per cent less than regular remittances.
“That means, even with a three or five per cent tax, we’ll be finding ways to bring down the cost of sending remittances,” he said.
In March 2025, total revenues at the food and financial services conglomerate rose 4.4 per cent to $44.2 billion, and net profit attributable to shareholders improved by three per cent to $2.2 billion.
James, who became CEO in mid-February, says the GK Group will be focusing on growth and sustainability, customer-centricity and innovation, and operational efficiency as strategic drivers.
The group’s pursuit of growth and sustainability is manifested in initiatives such as the investment in spice and sauce maker Spur Tree Spices Jamaica, in which GK acquired a 20 per cent stake, making it an associate company, as well as the 100 per cent acquisition of Catherine’s Peak and the 876 water brands.
“This is really very important because it not only allows us to further penetrate the Jamaican market but we have started to export these products as well,” James reported to shareholders.
Meanwhile, in relation to Key Insurance Company, which the conglomerate wants to take private, James reported that GK has already surpassed the threshold under the offer to purchase all outstanding shares.
The offer will remain on the stock market until July 17.
“This is an important strategic move for us which will really allow us to consolidate our holdings in Key Insurance and realise greater operational efficiencies and synergies in the insurance space. As you know, we have GK General Insurance and we now have Key Insurance, and that will make us a key player in the insurance business,” James said.
He added that GK was collaborating with Scotiabank in delivering general insurance products to their customers through its digital platform.
“There’re opportunities to increase the product offerings there and also to expand regionally with this product, and we are exploring those discussions very actively. Our Grace and Grace-owned brands are very important for us, and those continue to grow both in Jamaica and internationally,” James said.
English (US) ·