Economy

PIPE Networks, Colorpak and Campbell Brothers post big profit increases: Profit wrap

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The market might be bracing for a gloomy profit reporting season, but three medium-sized listed companies have proved there is some light at the end of the tunnel.

The market might be bracing for a gloomy profit reporting season, but three medium-sized listed companies have proved there is some light at the end of the tunnel.

PIPE Networks, which builds, owns and operates private fibre optic networks, announced profit for 2007-08 had increased from $4.8 million to $7.2 million, with revenue jumping 42% to $34.6 million.

PIPE’s shares have slipped from around $4.60 to $3.70 since the start of the year, but the result will provide a timely boost to the company, which is about 11 months away from completing its $200 million PPC-1 Pacific fibre optic cable linking Sydney and the United States.

ABN Amro Morgans analyst Nick Harris said in a note to clients that the result was particularly good because some of the costs associated with PPC-1 were incurred in 2007-08 rather than 2008-09 as budgeted.

This morning, specialist packaging company Colorpak Limited, which designs and manufactures printed cartons, labels, laminates and foils, produced a 23% increase in profit for 2007-08 to $6.2 million thanks to strong sales from the pharmaceutical, cosmetics, confectionery, wine and technology/multimedia sectors.

Colorpak managing director Alex Commins said the downturn in consumer confidence had made the market challenging, but believes the slowdown will create opportunities.

“The economic slowdown may provide new acquisition opportunities for us. We do expect the competitive landscape to remain very challenging, but we are well placed to manage it.”

Meanwhile, Queensland conglomerate Campbell Brothers says it expects a 60% increase in net profit for both the company’s first-half (for the six months to September) and full year (the 12 months to 31 March 2009) thanks to soaring demand for its analytical testing services.

The company, which operates a network of 400 laboratories worldwide, is seeing strong growth in its minerals, food and environmental testing divisions.

The company provides a great example of how businesses need to adapt to changing market conditions. Campbell Brothers was founded in 1863 and for many years was famous for its consumer goods, such as washing detergents. Now it is essentially a technology company and an Australian global leader.

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