China Redstone Group Inc., the largest private provider of cemetery products and services in Chongqing, China, today posted its financial results for the first fiscal quarter of 2011 ended June 30, 2010.
Revenue for the first quarter of fiscal year fiscal 2011 increased 45.4 percent to approximately $12.1 million, as compared to $8.3 million reported for the first quarter of fiscal 2010. The company said all revenue in the quarter was generated by cemetery plot sales, and that the increase in revenue was a result of enhanced marketing and advertising efforts and the development of new cemetery plots.
For the first fiscal quarter of 2011, the company sold 1,854 plots, a 12.3 percent sequential increase from the three months ended March 31, 2010. The average sales price per plot also increased, contributing to higher revenue. For the first quarter of fiscal 2011, each plot was $6,557, 14 percent higher than the average sales price for fiscal 2010 and surpassing the $5,000 to $6,250 that the company forecast for fiscal year ending March 31, 2011.
China Redstone reported gross profits for the first quarter of fiscal 2011 at $7.3 million, with gross margins of 60.5 percent, as compared to $4.4 million in gross profit and gross margins of 53.1 percent for the first quarter of fiscal 2010. The company attributes the increase primarily to a decrease in cemetery development costs paired with increased sales of deluxe tombs. Additionally, the company used a new technology for casting shale stone memorials, leading to a 60-percent decrease in the use of raw materials.
Operating expenses for the first quarter of fiscal 2011 were approximately $1.8 million, up 507.5 percent compared to the same period in fiscal 2010, driven by higher advertising expenses and higher general and administrative expenses commensurate with increased sales activities.
The company reported operating income for the first quarter of fiscal 2011 at approximately $5.5 million, a 34.1 percent increase from $4.1 million reported for the first quarter of fiscal 2010. Operating margins were 45.2 percent and 49.0 percent for the first quarter of fiscal 2011 and 2010, respectively.
As of June 30, 2010, cash and cash equivalents totaled $9.4 million as compared to $9.4 million on March 31, 2010. Inventory was approximately $17.5 million on June 30, 2010, versus approximately $11.2 million on March 31, 2010.
Yivou Ran, chairman and CEO of China Redstone, said the company has secured a foothold in the market, and that it expects to exceed previous estimates.
“As the largest developer and provider of cemetery products and services in the most populated of China’s four provincial level municipalities, China Redstone is well positioned to capitalize on growth in the death care industry. We are tracking our target to surpass 7,000 cemetery plots this fiscal year. The Company continues to experience strong demand for its cemetery plots due to rapid growth in our customers’ disposal income, the convenient location of our cemetery which services a population with 31.4 million residents in Chongqing, and the Fengshu created by the optimal lakefront location in a peaceful property. With 80 percent of our land still available for development, a strong working capital position and cash flow positive business, we are well positioned to capitalize on our growth plan,” Ran stated in the press release.