Blue Power acquires operating complex, still rents warehouse
Published:Thursday | June 21, 2018 | 12:00 AM
Blue Power Group Limited, which makes soaps and trades in lumber, purchased the properties that house its soap division in downtown Kingston within the quarter ending April.
The company acquired No. 4 and No. 6 Victoria Avenue in Kingston, but still leases warehouse space at 8 Victoria Avenue, said Managing Director Major Noel Dawes.
Dawes said the properties were acquired from a company called Alacrity Limited for $50 million. He said the acquisition would save on rental charges - which its financials indicate amounted to $2.52 million across the group - but also represented an investment in the future development of downtown Kingston.
"We do not see the value going down, but rather up," he said.
Complex upgrades
Blue Power over the years has invested heavily - including $80 million in the past two years - to upgrade the complex to meet its operational and manufacturing requirements. Part of that development included linking all three properties, creating a contiguous area for its office, factory and warehouse.
The principals of Alacrity, the sellers of the property, were not disclosed. But the company is a related party to Blue Power. The purchase was reflected as a $50-million addition to property, plant and equipment on Blue Power's books, valuing its fixed assets at over $159 million.
"With the revitalisation of downtown and the prices as they are now, and having spent so much in terms of our equipment and the like, we thought that it was prudent at this time to strategically invest in purchasing the properties," said Dawes, during a presentation at Mayberry Investments Limited annual general meeting on Wednesday, where he and other leaders of companies in which the investment house holds minority stake were invited to speak. Mayberry owns 19.9 per cent of Blue Power.
Blue Power Group made $102 million net profit on revenues of $1.5 billion for year ending April 2018. Annual sales revenue grew 7.5 per cent, but profit declined 16 per cent.
The company's board announced on Wednesday that it would consider a stock split at a meeting scheduled for early July 2.
"Please do not quote me saying this is a done deal, but it is something we are going to explore as a board, to see if it is something we are ready for at this time," said Dawes.