January 04, 2012
Despite a lackluster retail market and high administrative costs, the CEO of AML Foods is forecasting sales growth for the fourth quarter. As for 2012, Gavin Watchorn isn't prepared to make any predictions on what the future holds. Energy costs, consumer uncertainty and looming elections in both the United States and The Bahamas could mean spending slows down, as individuals wait to see what happens before making investment decisions.
"All of these things are happening and I don't feel like there is a feel of a general uptick in spending," Watchorn told Guardian Business. "We just don't see it and I find many of us are singing the same tune. We don't see the turn and it hasn't happened yet."
The outlook by AML Foods has been followed by the company's ability to stabilize its margins of late - a fact that should help with the bottom line when the fourth quarter figures are released.
Two influences on the fourth quarter, Watchorn explained, will be the preopening costs of the new Solomon's Fresh Market at Old Fort Bay Town Centre and the insurance deductible from a fire at one of the company's stores in Freeport late last year.
"I think we'll at least be on par with last year's numbers," he added. The forecast comes on the heels of AML Foods announcing it will invest $1 million in energy efficiency this year. Elaborating on the expenditure, Watchorn told Guardian Business the money will be split between Solomon's Supercenter and Cost Right locations in New Providence. The company seeks to improve insulation techniques and update equipment to reduce power use.
Watchorn revealed that AML Foods spent $200,000 more on electricity in 2011 than in 2010.
"It's a pretty strategic issue we seek to address," he added. "Many business are now in fear of working for the oil companies, so to speak. We just look at the world from The Bahamas and we don't see energy prices coming down. The reality is unless we start to make changes it will be more and more out of our control."
Third quarter figures from AML Foods, released last month, showed general and administrative costs increased by $383,000, or 5.96 percent. However, there was a sales increase of $981,000, or 4.29 percent, over the same period last year. The opening and continued success of Solomon's Fresh Market in western New Providence is expected to help produce strong sales figures for the fourth quarter and into 2012.
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