Big profit jump at Purity

Profit more than tripled before taxes at Consolidated Bakeries (Purity) and was up more than 400 percent after factoring taxation in the 2012 period to September, as profit after tax rose to $30.4 million up from $5.7 million, a 429 percent increase. For the September quarter, profit rose to $6 million compared to the 2012 quarter when the company reported a loss of $2.8 million.

The improved numbers did not show up in the quarter over quarter results as profit was lower than the $10 million earned in the June quarter. Some of the improvement is a recovery from a bad period in 2012. The second half of 2012, the year Consolidated went public, was not a good one as the company recorded a loss in the period compared to a profit in the 2011 period.

Revenue for the nine month period increased by 37.6 percent to reach $500 million compared to revenue of $363 million for the same period in 2012. For the quarter, revenue is up by 53.2 percent over the same period in 2012 to reach $172 million up from $112 million. “These increases represent growth in both unit sales and average sales per customer. During the quarter under review, input cost increased due to exchange rate movements and other factors,” management stated in their report to shareholders. Gross profit margin came in at 49 percent for the quarter down from 53 percent in 2012 and is 54 percent year to date, an improvement over the 52 percent enjoyed in 2012.

It looks as if the company will enjoy profits in the order of $35-40 million for the year or earnings per share around 20 cents. The company is focusing on improved efficiency, increased sales from existing products and new ones for both the local and export markets.

Cash funds and investments are up to $99 million from $24 million last year September and $98 million at the end of December. Current assets are up to $205 million from $184 million at the end of 2012 helped by increased receivables and inventories which grew $40 million year over year. At the same time, current liabilities are down as a result of the clearing of overdraft balance of $13 million and taxation of $9 million leaving $61 million as owing to third parties. Borrowing is up from $19 million to $49 million at the end of September this year versus last year September.