Blue Power reported profits for the quarter ending June 2013 of $30 million compared to $25 million in the same period last year, an increase of 20% and earnings per stock unit moved from 43 cents to 53 cents in the quarter, an improvement of 23%. While the growth is not bad, the operation was not firing on all cylinders as the increase came totally from the Lumber Depot division which contributed $18 million, improving by 34% over the same period in the previous year, while the Blue Power division added $12 million which was an improvement of 5% over the first quarter of 2012.
Combined sales were $246 million compared to $233 million for the same period last year, an increase of $13 million or just 6% much less than the increase in profit. The Lumber Depot division achieved sales of $175 million versus $154 million the previous year, an improvement of 14% while the Blue Power soap division moved down to $70 million from $79 million for a decrease of 11%. It was not only increased revenues which helped to grow profit for the quarter. Administrative cost was down from $33 million in 2012 to $27.9 million due to a write back of doubtful debt that was made in the last fiscal year to April and non-accrual of certain expense that was made in 2012 but not repeated in this latest quarter. Also, other income almost doubled from $2.2 million to $4.26 million.
The chairman Dhiru Tanna, in a release with the quarterly report stated that “we are pleased that despite the very challenging economic circumstances facing the country we were able to achieve an improvement in the overall performance. During the quarter, the Blue Power soap division faced serious competition in the market place with wholesalers and distributors shaving their prices significantly to reduce inventories. As a result, our ability to adjust prices in keeping with the exchange rate changes was seriously hampered and our sales actually declined. We have taken steps to offer more vendor-friendly packaging as well as significant promotions which we hope will reverse the trend.”
He went on to say, “We continue to take advantage of our cash position to acquire inventory for resale at advantageous prices which is the main reason for the increase experienced in this category on the balance sheet. Our analysis indicates that this approach is essential to remain competitive in a very stagnant market.”
Finances | Since the April year end, cash has increased to $153 million from $145 million but inventories are up to $198 million from $176.85 million. Accounts receivables has remained flat at $69 million. Amounts due to creditors amounted to $88 million the same level as in April. Equity capital amounted to $375 million and there is no longer any loan capital being used.
Insider call | Blue Power is an IC Insider Buy Rated stock.
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[…] Blue Power recorded 33 percent increase in sale revenues to $275 million for the October quarter this year compared to $208 million for the same period last year. The Lumber Depot division achieved sales of $191 million versus $135 million the previous year, an improvement of 42 percent while the Blue Power Soap Division saw sales moving up from $73 million to $84 million for an increase of 15 percent. […]