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Gleaner first-half profits improve despite tough second quarter

Published:Thursday | August 19, 2010 | 12:00 AM

DESPITE A one per cent dip in first-half revenue, The Gleaner Company has reported a more than 430 per cent rise in after-tax group profit, from $12 million to $66 million, for the six months to June 30.

The group's profit on continuing operations, at $76 million, was up 30 per cent - a performance reflective of the elimination of the now divested subsidiary Sangster's Book Stores, as well as the company's ongoing efforts at cost containment. The group's pre-tax trading profit was $96 million, against $59 million in 2009.

During the review period, group revenue of $1.6 billion was $21 million, or approximately one per cent, lower than for the first six months of 2009, while cost of sales dipped four per cent, to just under $754 million. Its distribution cost was down by a similar margin, to $288 million, while its administrative expenses were flat at $312 million. Other operating expenses declined seven per cent, to approximately $182 million.

Interest income rose by $9 million to $13 million, based on a larger portfolio of investments.

Virtually debt free

The upshot was that, after interest income and financing costs, as well as a tax charge of $11 million, the group posted net profit of $66 million, or earnings of 5.47c per share.

Significantly, The Gleaner Company, with assets of $3.16 billion at the end of June, reported shareholders equity of $2 billion, with the group remaining virtually debt free.

The company's balance sheet shows $649 million of cash and investments, up from $246 million in 2009, reflecting cash accumulated from the sale of its subsidiary, Sangster's Book Stores.

Commenting on the group's half-year performance, Deputy Managing Director Christopher Barnes said that the second quarter was extremely challenging, as the group sought to recover from a sharp drop in revenue resulting from the disruption to business caused by the recent security forces' operations in west Kingston and the subsequent declaration of the state of emergency. He said The Gleaner Company, like most other companies affected by these recent events, would be devoting efforts for the rest of the year to trying to recover from the fallout.