Editorial

Security

Politics

World

Letters

Sports

Obituaries

Archives

The Consumer Durables market is expected to grow by six to 10 per cent this year with the expected revival of the economy and the resultant market growth, Chairman and Managing Director of Singer (Sri Lanka) Ltd. Hemaka Amarasuriya said in the company's annual report for 2001.

The Consumer Durables market had declined by 10 per cent last year with falling purchasing power resulting from a declining economy, volatile interest and inflation rates and falling value of the local currency. "Traditional consumers diverted their financial resources to essential items and sales plummeted," he said.

Despite this, Singer (Sri Lanka) recorded an all time high gross turnover of Rs. 4.9 billion in 2001. Net turnover had grown by 9.3 per cent to Rs. 4.5 billion from Rs. 4.1 during the previous year. The Sisil brand which was introduced to the Singer portfolio in early 2001 contributed Rs. 316 million or 6.9 per cent to the sales. Rs. 935 million was contributed by non-Singer brands with Whirlpool and Hitachi recording all time highs.

Gross profit increased by 6.6 per cent to Rs. 1,530.2 million from Rs. 1,435.5 million in 2000. However, profits as a percentage of revenue declined from 35 to 34.1 per cent due to the decline in cash margins. The net profit after tax for the year is Rs. 136.7 million, which is Rs. 34.3 million below the 2000 profit of Rs. 171 million.

The net income of Singer (Sri Lanka) Ltd., excluding the share of associate company profits, was Rs. 108.3 million, a decline of Rs. 50.6 million from the previous year's Rs. 158.9 million.

According to the annual report, other income increased to Rs.6.5 million in 2001 from Rs. 2.5 million in 2000 mainly due to the Rs. 5.2 million exchange gains.

Meanwhile, finance costs of the group grew to Rs. 283 million from Rs. 222 million, an increase of Rs. 61 million or 67 per cent over 2000 mainly due to interest rate hikes. The 2001 income tax was Rs. 72.3 million against Rs. 79.1 million in the previous year. Administration and selling expenses also increased by 10 per cent to Rs. 1,057.9 million from Rs. 961.4 million. Return on equity was 13.8 per cent compared with 17.6 per cent in 2000.

"The Mega Channel comprising five appliance department stores reached upto our expectations while Channels, the traditional retail and wholesale businesses, also performed satisfactorily. Among product categories, home appliance and agro products showed outstanding growth both at turnover and operating levels. Domestic and industrial sewing machine sales slowed down. Furniture sales expanded with lower operating profits due to price competitiveness," Amarasuriya said in the report.

Singer (Sri Lanka) expects to see substantial growth in hire purchase accounts with the strengthening of its consumer financing sector. Retail and wholesale channels and after sales and customer services will be expanded while shops in the network will see an improvement.

Singer plans to open several specialty furniture shops this year to increase the present turnover of Rs. 158 million from the sector. As a means of enhancing its communication business, it also plans to open 'phone shops' and 'kiosks' in suitable locations. Dividing the product portfolio into eight strategic business units with the focus of improving market shares, margins and product quality is also in the cards.

Shareholders' funds have now passed the one billion rupee mark and stand at Rs. 1,000,877,000 at balance sheet date. The company's market capitalisation is at Rs. 1,089,825,800. Despite a 20 per cent profit decline, dividends of Rs. 3.70 per share were paid.

Singer's profits from the share of associated companies increased to Rs. 30.8 million from Rs. 15.9 million in 2000.

First Capital Ltd. was restructured to be a holding company while its subsidiaries - First Capital Treasuries Ltd. and First Capital Money Brokers - reported strong performances. The Group directors have decided to invest in a 1:2 Rights Issue of First Capital to support expansion which will include a new asset management subsidiary.

The successful debt recovery programme of Commercial Leasing Company enabled it to record a substantial profit improvement through write-backs of bad debt provisions while Commercial Fund Management is breaking even after a series of losses.

The Singer directors have resolved to dispose of its investment in Telshan Network Ltd. and is now awaiting a suitable buyer. "This investment does not have compatibility with our overall business strategy," the Chairman's review said.

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager