Berger Paints starts off the new earning season for the quarter to September with improved profit for the six months of $13 million, up 80 percent compared to $7.2 million for the same period in 2012 as sales rose 12 percent to $787.4 million. Importantly, revenues accelerated in the September quarter by 17.8 percent over that of 2012 compared to only a 5 percent increase in the first quarter.
Profit in the latest quarter was up by 76 percent to $16 million and augurs well for the all-important December quarter when it has the bulk of sales and profit.
Cash resources, which amounted to $130 million at the end of the March 2013 year end, is down to $33 million at the end of September. The bulk of the reduction went into working capital which rose from $512 million to $637 million excluding cash funds.
A dividend of 13 cents per share totalling $27.362 million was paid in July, 2013. Berger has no significant borrowed funds used to fund its operations.
If the present trend in revenues and margins continue, profit for 2014 should end up around 35 cent per share compared to 19 cents in 2013 to March. The problem with Berger is its strong reliance on the performance in the wider economy for growth. Right now that is not happening although there are signs of some pick up in the construction sector that the company could benefit from even as large amount of paints are sold for renovation of existing buildings than new start-ups.
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[…] After paying a dividend of $27.86 million in July, the company had cash on hand in December amounting to $58 million that is down from $163 million at the end of December 2012 and $130 million at the end of the March 2013, but the cash position is an improvement over the $33 million on hand at the end of September. […]