Blue Power disappoints again

For the six consecutive quarters, soap manufacturer, Blue Power, disappoints investors, with a fall in profit compared to the prior year’s results. For the three months to July this year, the company reported profit before tax of $21 million compared to $29 million in the same period last year, a fall of 28 percent.
Revenues for the period ended at $306 million that are up 8 percent from the $282 million for the same period last year and a big recovery from $260 million experienced during the poor April quarter.
The five-year tax-free concession the company enjoyed for listing on the junior market ended in April, resulting in an estimated tax liability of $2.19 million which reduces net profits to $18.60. The profit performance helped to generate gross cash flow from operations of $24 million versus $28 million in 2014.
While sales grew, gross profit fell and gross profit margin declined with the former falling to $64 million from $66 million and administrative and other expenses rose 14 percent to $46 million.
The contribution of Lumber Depot division to the before tax was $7.55 million and $6.09 million in 2014, while Blue Power division contributed $13.24 million and in 2014, profit of $22.6 million. Earnings per stock unit for the quarter fell from 51 cents to 33 cents.
Divisional sales had mixed fortunes with the lumber depot division enjoying an increase of $28 million to $212 million, while sales for the Blue Power division, declined by $3.5 million to $90 million in 2015 compared to July 2014 quarter. Sales for both divisions were higher in the July quarter than for April with the Lumber Depot sales also improved from $189 in April 2015 and Blue Power division from $71 million.

Blue Power jumped to a 52 weeks’ high of $14 on Monday

“We attribute some of the improvements in the Lumber Depot division to the whole range of changes made in the previous six months in terms of service, advertising, web site development, etc. In the Blue Power division, we resumed sales to one of our major customers while shipping a number of containers of laundry soap to Guyana,” Dhiru Tanna CEO said in a release with the financials.
Cash and equivalent has risen to $168 million from $156 million in 2014 and receivables declined to $74 million but Inventories jumped to $266 million from $220 million while loan financing amounts to just $8.7 million.
The stock which was previously given a BUY RATED grade lost it with the declining profits and no clear indication of a strong pick up in revenues to propel profits upwards to warrant a buy rating at this time.