July 7, 2010 / 12:11 PM / in 8 years

UPDATE 1-Colabor Group profit up on tax gain; eyes acquisitions

* Q2 rev C$245.2 mln vs est C$258.7 mln

July 7 (Reuters) - Canada’s Colabor Group Inc (GCL.TO), a wholesaler and distributor of food and non-food products, reported a rise in quarterly profit helped by a tax gain and said it would actively pursue acquisitions.

Colabor, which converted into a corporation last year, said that it expected a gradual improvement over the rest of the year as the easing of economic worries would lead to improved discretionary spending.

Second quarter net income rose to C$4.2 million, or 20 Canadian cents a share, from C$1.7 million, or 12 Canadian cents a share, a year ago.

The net income reflects, in part, a low tax rate due to the acquisition of about C$130 million in tax losses for which it paid C$5 million to ConjuChem Biotechnologies, at time of converting to a corporation, Colabor said.

Sales fell about 14 percent to C$245.2 million, mainly due to the loss of a major supply contract in February. Comparable sales were down 2.6 percent.

Analysts on an average were expecting earnings of 23 Canadian cents a share on revenue of C$258.7 million, according to Thomson Reuters I/B/E/S.

Shares of the company closed at C$11.56 Tuesday on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Savio D’Souza)

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