Asia Capital net profit Rs. 222m after losses over three years

Asia Capital PLC has achieved a net profit of Rs. 222 million for the year ending March 2010. This is a complete turnaround for the group of companies compared to a Rs. 379.2 million loss in the year 2009.

Financial highlights

Monohan Nanayakkara

The operations for 2010 showed a decline in cost of sales which resulted in this profit even though the revenue figures have seen a drop compared to the same period in 2009.

The share price alone has increased from a low of Rs. 5.5 in April 2009 to around Rs. 47 at the time of writing.

Operational highlights

Asia Capital PLC was faced with a difficult and challenging few years beginning FY2007 up until 2009 due to many changes in the management along with several resignations and new entrants to the Board of Directors. It is at this time that Monohan Nanayakkara took over as Chairman and Managing Director.

"Over the last several decades, it has been the norm of the management of listed companies in Sri Lanka to bemoan the external environment of considerable political and economic adversity," he said.

"It was my pleasure to take the helm of this company in the immediate aftermath of the cessation of the war and to have led the company during a turbulent period which was coincidentally also the first period of hope in my entire adult working life.

I consider myself lucky to have had this opportunity. My team and I have been working hard over the last year to translate this opportunity into results for all stakeholders of our company".

According to Nanayakkara, the turn-around strategy was not an easy one.

"The Change Management Committee and the Group Management Committee were the two teams appointed to help me implement it," he said, whose job is to identify and exploit synergies among the three major elements of the core business; namely Stockbrokering and Investment Banking, Insurance, and Credit and Deposit Mobilisation.

Together they formed a cohesive team to maximize value to the group shareholders, whilst minimising the conflict of interest amongst the majority and minority shareholders and between divisions.

As a result there has been a clear increase of the earnings per share from a negative of Rs. 4.04 in 2009 to a positive of Rs. 1.91 this year. "We see ourselves continuing to generate cash and make investments in the medium term," continued Nanayakkara, stating that they plan to strengthen their ownership control over their core holdings in the first instance and brand and expand the 'Asia' franchise to exploit the synergistic business opportunities in financial services within the core holdings.

Future plans

Nanayakkara said that they wish to exploit their positioning in the financial services industry to the non-core areas where they will continue to invest in companies that have either fundamentally good management or those that require attention, both financially and management-wise.

"Success is 80 percent luck and indeed we were lucky due to the opportunities that were presented to us.

The balance 20 percent is due to know when we are lucky and to make the best use of it.

I am grateful to the members of my team and the staff of all group companies for their commitment and hard work to stabilise Asia Capital PLC and record commendable results," concluded Nanayakkara, adding that at Asia Capital they know that change is key and it is in that spirit that they look forward to more exciting and booming years of business.