The Gleaner Company posts improved first-quarter results

HAVING POSTED modest growth in revenue, and achieved some success in containing its costs, The Gleaner Company Ltd reported net profit after tax of $31 million in the first quarter of 2010, reversing a loss of approximately $15 million for the corresponding period in 2009. Pre-tax trading profit at $48 million improved by $43 million over the prior year.

The results translate to earnings of $2.62 per share, against a loss of $1.13 during last year's first quarter.

"The first-quarter results reflect the carry-over benefits of the restructuring efforts undertaken over the past two years in response to a challenging economy, as well as a modest increase in revenues for which we are grateful," said the Gleaner Company's deputy managing director, Christopher Barnes.

"In the current environment, while it is important to pursue revenue-growth initiatives, managing your costs is absolutely essential," Barnes added.

subsidiary divested

For the period January to March, The Gleaner Company Ltd had revenue of $790 million, two per cent up on the $773 million for the 2009 first quarter, the latter adjusted to remove the impact of the group's Sangster's Book Stores subsidiary, which was divested late last year.

Cost of sales, at $352 million, was approximately three per cent lower than the corresponding quarter last year, while distribution costs, administrative expenses and "other operating expenses" were down, on average, by eight per cent. Total operating costs were down $47 million, or six per cent to the prior year's first quarter.

The upshot was that the company posted a profit on its continuing operations, before net financing income and taxation, of $38 million, an improvement compared to $7 million posted in the 2009 first quarter.

Net finance income/cost, plus taxation and minority interests, brought the net earnings to stockholders to $31 million.

The group's balance sheet remains healthy, with increased short-term investments and a trade and other receivable position 14 per cent better than prior year. "The performance improvement achieved puts the Gleaner Company in a better position to weather the storm which continues, take advantage of a recovery in the economy when it occurs, and to pursue any attractive investment opportunities that may arise," said Barnes.