The Blue Power Group held its annual General meeting on Friday September 15, 2017.
The Group’s Managing Director, Major Noel Dawes, gave an analysis of the company’s performance over the last financial year and most recent quarter. Maj. Dawes noted that, “the financial year shows increased sales and improved profits. Overall sales for the twelve months are up from $1,216 million to $1,395 million (+15%) with the Lumber Depot Division showing an increase of 11% and the Blue Power Division improving by 24%. Profits before tax rose by 65%, from $85 million to $140 million. After tax profits improved by 60%, from $76 million to $122 million. Earnings per stock unit increased 60% from $1.35 to $2.16.” Also of importance is the Group’s export initiate, which the company has focused resources on. Major Dawes reported that, “export sales continued its growth, increasing by 31. Almost 16% of Blue Power Division’s overall sales came from exports.”
Major Dawes indicated his satisfaction with the Company’s result for the fourth quarter of 2016, even with a slight decline in the profitability of the soap division. For the financial year as a whole, gross profit margin for the company saw an increase over the previous year from 21% to 23%.
Moving on to the company’s balance sheet Major Dawes highlighted that, “the value of our plant and equipment increased significantly from $64 million to $114 million as a result of the substantial improvements undertaken in both divisions, while inventory levels rose from $219 million to $243 million to support the increased level of sales which also resulted in a higher level of receivables.”
Towards the end of the year, the Group paid off a loan which it had acquired from DBJ for the installation of a solar power systems according to the Managing Director.
In terms of capital expenditure Maj Dawes indicated that there has been over $65 million in new investment which resulted in:
Ø Additional covered warehousing facility comprising almost 10,000 sq. ft.
Ø Relocation of laundry soap line within a refurbished area in the factory which allows for a more streamlined operation.
Ø Relocation of all wrapping units in one area to permit easier and cleaner operations.
Ø Acquisition of second hand laundry soap making machines from a local producer with an understanding that the company will meet the demand of their customers through a co-packing arrangement.
Ø Preparation for the installation of a second bathing soap line including a cutting machine and a new stamping machine.
Ø Installation of a large air conditioning unit to cover the sales area at Lumber Depot Division in Papine.
Ø Acquisition of two fork lifts and a vehicle.
On the issues of capital expenditure Maj Dawes ended by pointing out that, “some of the installation work is still in train but the initial response from our staff and customers is positive and the increase in capital expenditure has led to an increase in the staff compliment from 59 to 77.”
Transitioning to his outlook for the company, The Managing Director indicated that, “for the Lumber Depot Division, we will continue to seize opportunities for discounts and better prices in order to offer a better deal for our customers while maintaining our margins at an acceptable level.”
“At the Soap Division, we have introduced very attractive wrappers for our bathing soaps, all under the Blue Power Castile name. The overall design of the wrapper with an attractive lady in the foreground against a waterfall has given a boost to our sales efforts. In addition to our normal channels through the wholesalers, it is now much easier to find our products in supermarkets and pharmacies,” he added.
Major Dawes further stated, “the most important development during the year under review has been our entry into production of specific soaps for Jamaican distributors wishing to export. We now produce for three more distributors in Jamaica who order products for export under their brand names. We hope that this will be an expanding area of our activities, allowing us to contribute even more to the export and growth thrust of the country.”
Touching on export, Major Dawes noted, “in the export arena, our new distributors in the USA have mounted special efforts to improve their performance, especially in the South East. Our distributor in Guyana continues to perform although faced with foreign exchange shortages. We continue to promote wrapped Blue Laundry and carbolic soap as well as our hotel size soap. Our efforts in the Barbados market are beginning to bear fruit as we have significantly improved sales to that market. A distributor in Grenada has now started buying bathing soaps along with laundry soap and has indicated that his first shipment of the bathing soaps was exhausted almost immediately upon arrival. Trinidad and Tobago continues to pose a challenge as our distributor pleads lack of foreign exchange as the reason for lack of orders.”
The Managing Director ended his address to shareholders indicating, “the reorganization of the factory is almost complete as a result of which we are in a position to produce and deliver more products, having also added a second shift. Our marketing efforts are now being intensified to attract new customers and to work with existing distributors who are being asked to look for additional areas where their own branded products, made by us, could be sold.”