Medical Disposables and Supplies Limited (MDS) is finalizing plans to establish a foothold in the Cayman Islands through a new joint venture called MDS Cayman. In this arrangement, MDS will hold a 30 percent stake in the company, which aims to supply pharmaceuticals and medical supplies to hospitals, clinics, and other health facilities across Cayman and the broader Caribbean.
According to a disclosure made on the Jamaica Stock Exchange (JSE), MDS Cayman’s formation commenced in October 2024 and is expected to be completed by March 31—the close of MDS’s financial year. Once the necessary formalities are concluded, the venture is slated to begin its operations in April 2025.
A Calculated Entry
Describing the Cayman Islands as a natural extension of the company’s regional ambitions, MDS Chief Executive Officer (CEO) Kurt Boothe highlighted the potential for growth. “We’re always scanning for opportunities that align with our strategic roadmap. The Cayman market appeared to have key growth segments for us, so after gaining familiarity with its environment, we decided on a deliberate entry,” he explained.
While Boothe chose not to share details regarding the specific investment amount or the identity of MDS’s local partner until official completion, he emphasized that the venture’s initial scale would be modest. “We believe in ensuring a stable foundation first. Our approach involves minimal capital expenditure and controlled staffing, which helps us manage risk during market entry,” he added.
MDS Cayman will be accounted for as an associate company in MDS’s financial statements. This structure also reflects Cayman Islands’ regulations, which typically require majority local ownership unless a special license is granted.
Previous Growth Moves
This Cayman Islands initiative is MDS’s second major expansion endeavor in recent years. In March 2021, its 60 percent-owned subsidiary, Cornwall Enterprises Limited, acquired the operations of Cornwall Medical and Dental Supplies Limited, adding three pharmacies in western Jamaica and additional medical distribution capabilities to MDS’s portfolio.
More recently, MDS expanded its consumer product range by securing the distribution rights for True Pet Food in Jamaica, a line owned by Caribbean Broilers Group. The collaboration was spotlighted at MDS’s sixth Mpowered continuing education conference for pharmacists, where True Pet Food served as a primary sponsor. In addition to Jamaican pharmacists, the event hosted virtual attendees from the Cayman Islands—a signal of MDS’s growing inter-island professional network.
Financial Hurdles and Performance
Despite strategic advances, MDS has navigated financial headwinds in the past two years. The pharmaceutical distributor recorded a $315.96 million consolidated net loss for the fiscal year ending March 31, 2024, partially stemming from the write-down of excess COVID-19 inventory.
In its second-quarter report for 2024, MDS noted challenges including product shortages, intense competition, and the residual effects of Hurricane Beryl, which struck Jamaica last July. Still, consolidated revenue grew by 5 percent to $907.74 million, although profit margins narrowed, influenced by a 10 percent climb in cost of sales. MDS’s gross profit margin slipped from 25.36 percent to 21.85 percent, reflecting competitive pressures and inventory liquidations.
Operating expenses inched up slightly to $220.53 million, turning a previous operating profit of $8.87 million into a $22.15 million operating loss for the quarter. After factoring in lower financing costs, the company posted a $49.89 million consolidated net loss, up from $38.28 million in the same period the prior year.
On a year-to-date basis, revenue climbed 5 percent to $1.88 billion, but operating profit sank by 78 percent, landing at $7.20 million. Consequently, the consolidated net loss for the six-month period increased from $38.39 million to $47.73 million.
Stock and Shareholder Updates
Over the course of 2024, MDS’s share price dropped 39 percent, though it has seen a 13 percent uptick in January, closing recently at $1.86. With a market capitalization of $489.47 million, the stock continues to trade just above the $1.83 listing price.
Shareholders and other stakeholders will get additional insights into MDS’s forward strategy at its 10th annual general meeting, set for February 20 at the company’s head office. This meeting occurs only days after MDS is scheduled to release its third-quarter financial results, which may further clarify how the Cayman venture and other initiatives fit into the company’s broader plans for recovery and growth.
