Blue Power Group has grown its bottom line behind higher soap sales and better prices from suppliers.
The soap manufacturer and hardware distributor reported a 50 per cent increase in third quarter net profits to $23.2 million. For the period ending January 31, 2013, total revenues were $266 million or 13 per cent higher than the corresponding period the prior financial year.
On a year-to-date basis, the company has seen total sales jump by more than 10 per cent to $706 million while net profits almost doubled to $67 million, boosted by a combination of higher soap sales and improved margins.
"In order to realize improved margins and higher sales we have had to pre-purchase products for resale and maintain adequate levels of raw material stocks, resulting in a substantial increase in inventory levels when compared to the previous year," said Blue Power chairman Dhiru Tanna.
"We wish to take this opportunity to thank our customers, distributors, suppliers and staff for their support during this difficult period," he said.
The lumber depot division, which continues to be impacted by the downturn in the construction sector, increased profits over the nine-months period by 25 per cent to $31 million, despite flat sales. The major contributor to the improvement in the bottom line of the segment was its margin achieved through a focus on obtaining better prices from suppliers, said Tanna.
A profit of $30 million for the soap division at the end of the nine-months period was almost three times more than the corresponding period the year prior. The soap division's performance was behind increased revenues of 37 per cent. According to Tanna, in this segment, both increased sales and better margins provided the basis for the significant increase in profits.
Total administrative and other expenses jumped by 22 per cent to $99 million.
Largely known for its "cake soap", Blue Power Group in 2010 became the second company to list on the junior stock market, raising some $88 million in an initial public offering.