Stuart Lacey, a Gleaner Company shareholder, examines the consolidated first quarter results during the Company's annual general meeting at its North Street, Kingston office yesterday. - Rudolph Brown/Staff Photographer The Gleaner Company Group saw encouraging growth in its earnings during the first quarter ending March 31, 2002 with after tax profit increasing by about 36 per cent from $18.2 million in 2001 to approximately $24.8 million in 2002.
Over the same period, revenue increased by 20 per cent to $470 million, largely attributed to an increase in advertising and circulation revenue. The cost of sales was up 18 per cent to almost $250.8 million, while gross profit increased by 22 per cent to $219.2 million.
The Gleaner's Financial Director Christopher Roberts said, however, that the company might not be able to maintain the first quarter profit trend for the remainder of the financial year. Mr. Roberts said the company's fortunes would depend on the price of newsprint, which increased by about 35 per cent in the year 2000, continued to rise during part of last year and has since started to trend down. He was presenting the financial statements and results for the year ended December 31, 2001 as well as the first quarter unaudited results during the Gleaner Group's annual general meeting at its North Street office in downtown Kingston yesterday.
For the year to December, advertising revenue went up by $164 million to just over $1 billion largely because of a 10 per cent increase in advertising volume, while an increase largely attributable to an increase in circulation volume added $60 million or a 12 per cent increase to the $506 million earned from that source last year, Mr. Roberts said. He added that advertising and circulation revenue continued to grow, despite competition from the electronic and print media.
Books and stationery sold by The Gleaner's wholly-owned subsidiary, Sangster's Book Stores, increased by $41 million, largely attributed to growth in retail sales and in particular children's books.
The Gleaner's chairman and managing director, Oliver Clarke, told shareholders that "the company has not had the growth in profits last year that we all had hoped for" but he "hoped that this year will be better".
Earlier, Mr. Roberts told the meeting that the net book value of the company increased by 85 per cent over the past five years, from $676 million at the end of 1997 to more than $1.2 billion at the end of last year. Interestingly, he said that based on yesterday's market price of $2.50 per share, the market value of the company was over $2 billion which was in excess of the book value of about $1.3 billion.
Managing Director of the Gleaner-Online, Marlene Davis, said the company's Internet business continued to grow, exceeding 50 million hits a month and the three million mark in terms of page views per month. Mr. Clarke said that although Go-Jamaica was not a major contributor to the bottomline of the company at this time, it has the potential to become one.
The Gleaner's subsidiary, Independent Radio Company, operator of Power 106 radio station, has also started to make its impact on the company's revenue base from the two new programmes, 'Nationwide' and 'Perkins on Line', said General Manager Newton James.
Mr. James said Power 106 was also poised to increase profitability because of its new format to transmit talk programmes 24 hours a day, seven days a week. He said a new music station would become operational within another six weeks.
Mr. Clarke said that while the company's investment in Power 106 had not been a major profit centre when it started, "you can see it revving up now".
In his outlook for the remainder of the year ahead, Mr. Clarke said the company was endeavouring to improve on the profitability of its core operations by boosting sales of its publications and increasing advertising revenue.
Re-elected to the board of directors during yesterday's meeting, were retiring directors Joseph M. Matalon, Morin Seymour and Lisa Johnston, as well as Dr. Carol Archer, who was appointed to the board last December.
