Hayleys MGT Knitting Mills PLC has reported Gross Profit growth of 47 per cent to US$ 2.6 million for the six months ending 30th September 2012, signaling a turnaround by the Hayleys Group’s cotton and synthetic fabric supplier in Sri Lanka.
The company, which posted a loss before tax of US$ 3.1 million for the first half of the preceding year, has reduced its pre-tax loss to US$ 599,545, and registered a cash profit of nearly US$ 800,000 for the period reviewed.
Hayleys MGT Knitting Mills Chairman Mohan Pandithage said that several measures taken by the company including successful implementation of the SAP Enterprise Resource Planning System have placed the business on a recovery path, and that the company is confident it would be out of the red by the end of financial year.
In end 2010, Hayleys MGT disclosed to the Colombo Stock Exchange that discrepancies between actual inventories and trade receivables had added US$ 3.27 million to administrative expenses, and generated a loss of US$ 5.2 million at pre and post tax level at the end of the third quarter of the year. A complete restructuring of the company followed.
According to interim financial statements filed with the Colombo Stock Exchange, Hayleys MGT has reduced its borrowings by more than 31 per cent in the first six months of the financial year, from US$ 20.7 million to US$ 14.2 million.
The company has also improved gross margin by nearly 5 per cent through initiatives to eliminate waste and contain costs, and reduced administrative expenses by 43 per cent in the review period.
Net finance costs, however, increased by 18 per cent during the period mainly due to translation losses arising from the Rights Issue in Sri Lanka Rupees.
Hayleys MGT Knitting Mills has the capacity to produce up to 250,000Kgs of Single Jersey, Interlock, Fleece, Polar Fleece, Rib and Pique per week at its 33 acre plant at Narthupana Estate in Horana. The company is a leading weft knitted fabric supplier to several top international brands.
The Board of Directors of Hayleys MGT Knitting Mills PLC comprises of Messrs A. M. Pandithage (Chairman), Dr. E. M. Fernando (CEO), R. Seevaratnam, K. D. D. Perera, S.C. Ganegoda, J. A. G. Anandarajah, H. Somashantha, R. N. Somaratne, R. P. Pathirana and J.A.S. Piyawardena.