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Hayleys Ltd., the Sri Lankan multinational bluechip, has
reported healthy growth in turnover, pre and post tax
profits for the year ended March 31, 2005, despite
losses attributed to exchange rate movements in the
final quarter, costs incurred on tsunami relief and
costs of restructuring.
According to
the Group's financial results presented to the Colombo
Stock Exchange yesterday, pre-tax profit grew 37% to Rs
1.9 billion on a turnover of Rs 19.4 billion, which
reflected a growth of 25%. Profit after tax grew 33% to
Rs 1.4 billion. These results were achieved despite an
adverse impact of more than Rs 300 million on turnover
and profitability mostly in the final quarter of the
year. The post-tsunami appreciation of the Rupee against
the Dollar by 7% cost the Group Rs 200 million,
donations and pledges toward tsunami relief cost another
Rs 45 million, while Voluntary Retirement Schemes
related to restructuring in two sectors of business cost
Rs 56 million.
Profit after
tax attributable to the Group, considered the "ultimate
bottom line," grew 17.4% to Rs 774 million.
In keeping with the principle that profit retention
beyond that needed to sustain the real value of equity
has to be minimal, the Group has proposed a final
dividend of 17.5%, bringing total dividends for the year
to 35%. The dividend payout for the year is Rs 262.5
million, an increase of 50% over the previous year. The
Group also floated a rights issue of 1 share for 10 held
in the second half of 2004 and declared a bonus issue of
4 shares for every 11 in early 2005. Shareholder funds
as at March 31, 2005 had grown 11.7% to Rs 7.9 billion.
Reviewing
the results for the year, Hayleys Chairman Rajan
Yatawara has said he is optimistic of achieving at least
a 50% improvement in Group profits in the current
financial year, given a stable security situation in the
country and an exchange rate that is competitive with
regional currencies.
Chief
contributors to the conglomerate's performance in the
year under review were the Dipped Products Group (DPL)
comprising Hand Protection and Kelani Valley
Plantations, the Maritime Holdings Group in the
Transportation segment and Inland Marketing. DPL, whose
results have already been announced, improved its
pre-tax profit by 57% over the previous year, while
Maritime Holdings generated impressive contributions
from its shipping agency business, freight management,
container depots and its recent venture into ship
owning.
The Group
invested Rs 2.6 billion in the year under review in
initiatives that will help consolidate and expand its
core businesses and derive a higher share of profits
from them. These "core" businesses have been
reclassified for reporting from next year, on the basis
of the end product or service and the market catered to,
taking cognizance of size and potential and reflecting
the Group's competencies.
New
benchmarks for performance and areas for "close focus"
have also been developed, Mr. Yatawara said. "Loss
making entities that do not fall comfortably into the
matrix of activity defined will be sold. Strategic
alliances with partners who are more competent will be
sought for others," he disclosed. "We will exit from
businesses that cannot grow adequately over the next
three to five years, or which depend on providence or
government policy change to achieve the required
growth."
Established
in 1878, the Hayleys Group comprises of local and
international businesses in Coir, Hand Protection,
Environment, Agriculture, Plantations, Transportation,
Inland Marketing, Knitted Fabrics and Tourism. The Group
is believed to account for the second largest export
volume from Sri Lanka.
The Board of
Directors of Hayleys PLC comprises Messrs R.
Yatawara (Chairman), N. G. Wickremeratne (Deputy
Chairman), R. A. Ebell, Dr. W. M. Tilakaratna, A. M.
Pandithage, L. K. B. Godamunne, P. S. P. S. Perera, J.
D. Bandaranayake, A. D. B. Talwatte, A. Hettiiarachchy
and M. R. Zaheed. |
