Chairman & Chief Executive Officer’s Report

The year 2009 was one of the most challenging for our business, as both Jamaica and the rest of the world continued to grapple with the worst recession in decades.

The housing and construction sectors were badly hit, and our overall revenues declined by 12.5% as investors delayed major projects, contractors delayed construction of housing, and consumers delayed purchasing of home improvement products. However, our farm and garden supply business remained stable, as the expansion of the agricultural sector continued.

Our results were also significantly impacted by the devaluation of the Jamaican dollar in the first quarter of the year, and high interest costs throughout the year.

The net loss attributable to stockholders was $225.8 million as compared to a net loss of $259.9 million recorded in 2008. The earnings per share for the year were ($2.79) compared to ($3.21) for 2008.

In response to the difficult economic conditions in 2009, we focussed on cost reductions and customer service improvements. This resulted in the reduction of inventories and short term debt, and improved product availability at our wholesale and retail stores. These actions, in combination with the commencement of refurbishing of most of our stores, led to improved results in the second half of the year.

The focus for 2010 will be on the vital few actions that will ensure a sustainably profitable business going forward. These actions are to continuously reduce our costs, improve our supply chain management, improve our customer service, improve our internal controls, and grow our farm supplies business. These actions have been wholly integrated into our Balanced Score Card (BSC) and strategic plan for 2010 to 2015.

We wish to express our gratitude to the management and staff for their hard work and commitment during 2009.
We also thank our customers, suppliers, and other stakeholders for your continued loyalty and support.