By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AML Foods yesterday revealed that increased costs and inflation took a bite out of its annual profits after net income for the 12 months to end-April 2023 declined by 30 percent year-over-year.

The BISX-listed food retail and franchise group, unveiling its fourth quarter and 2023 annual results, revealed that profits for the full-year dropped by $1.2m from $4.03m in 2022 to $2.803m this time around as multiple expense increases squeezed its margins.

Costs increased at a faster rate than sales. While sales for the year to end-April 2023 jumped upwards by 5.5 percent, rising by more than $9m to $184.951m as opposed to $175.3m the prior year, AML Foods' cost of sales rose by $10m or 8.3 percent to hit $131.26m.

As a result, the Solomon's Fresh Market and Cost Right operator suffered a slight decline in gross profits from $54.082m to $53.691m year-over-year. And, with selling, general and administrative costs increasing by more than $1.75m or 3.7 percent, growing from $48.156m to $49.918m, the BISX-listed group's net operating profit fell by more than $2m or 28 percent, dropping to $5.279m from $7.344m in 2022.

Gavin Watchorn, AML Foods' president and chief executive, said in his message to shareholders: "We are pleased to report positive sales growth, driven by increases in overall customer counts. This is an indication that our shoppers are appreciating the value we are providing during difficult times, as well as the changes we are making to our product mix in stores.

"Margin, however, continued to be impacted by rising costs as well as other influences. Additionally, we are recording significant increases in energy, insurance and payroll costs, but overall continue to manage expenses well compared to the prior year.

"As a whole it has been a challenging year, which began with supply chain challenges, then continued with having to manage inflation while still delivering value and affordability to our customers. We are confident that the foundation we have established for our business is strong, and look forward to recording improved results in 2023, all while balancing the needs of our customers, associates and shareholders."

AML Foods' unaudited financials reveal that profits at its franchise division, Domino's Pizza, actually doubled year-over-year from $543,000 in 2022 to $1.143m. However, that for its core food distribution business fell from $17.007m to $13.61m, leaving less net income to cover its corporate overheads.

The BISX-listed group also confirmed it has undrawn credit lines worth $6.7m available to it after completing the acquisition of the Old Trail Building, which houses its Solomon's Super Centre format, from Solomon Brothers. "In May 2023, the company signed a new credit facility for an additional $1.7m," AML Food said.

"Additionally, in May 2023, the company completed the purchase of the Old Trail Building where its current Solomon’s Super Centre store resides. A total of $10.5m was drawn down from the credit facility to complete the purchase and fund renovations on the building. A total of $6.7m remains to be drawn down on the credit facility."

AML Foods continued: "Further, in May 2023, the interest rate on all of the company’s existing bank loans were reduced to 3.65 percent in accordance with the terms of the new credit facility. At April 30, 2023, the company had a total of four bank loans with RBC Royal Bank (Bahamas), which bear blended interest rates between 3.65 percent and 4.25 percent. The total principal amount outstanding on the company’s loans was $8.1m."