Textured Jersey net profit hits Rs.1b
Textured Jersey Lanka PLC (TJL) has posted an impressive Rs. 1.02
billion net profit for the year ended March 31, 2013 (FY2012/13), an
increase of 62% year-on-year, as per the latest results released to the
Colombo Stock Exchange (CSE).
A combination of a strong order book consisting of major customers
such as Victoria's Secret, Marks and Spencer, Intimissimi and Decathlon,
improved operational efficiencies and strict control of overheads
supported by a strong balance sheet allowed TJL to surpass the Rs. 1
billion milestone in net profit for the year.
Besides this impressive performance, Textured Jersey has also
maintained its generous dividend policy and paid an interim dividend of
Rs. 0.66 per share in March 2013, representing a pay-out of 62% of its
nine month profit ending December 31, 2012. Its share price has
outperformed the ASPI with an increase of 54% during the 12-month period
ending May 6, 2013 and a 13% increase in the ASPI.
For the quarter ended March 31, 2013 (4Q FY2012/13) TJL reported a
profit of Rs. 323 million, a 48% year-on-year increase. However, as per
the release to the CSE by the Chairman of TJL, Bill Lam, although the
company achieved improved efficiencies and a better product mix,
quarterly margins were affected by a rise in cotton prices and the
typical lag in selling price adjustments.
As a result, gross profit for the quarter came in at Rs. 355 million,
a 31% decrease year on year.
According to Lam's statement, during the corresponding quarter last
year, TJL benefited from a sharp drop in cotton prices, which makes the
year-on-year decline during 4Q FY2012/13, more pronounced. However, on
an annual basis, the improved margins during the year resulted in gross
profit for FY2012/13 remaining at Rs. 1.3 billion, a marginal 1.5% below
last year's figure despite revenue for the year being 10.5% lower
compared to last year.
Lam said, "TJL maintained a tight control on overheads, reducing
administrative expenses by 64% and selling and distribution expenses by
12% in 4Q FY2012/13 compared to the same period in the last financial
Despite this, due to the lower quarterly gross profit, TJL's
operating profit for 4Q FY2012/13 was Rs. 288 million, a 21% decrease
year-on-year. The annual operating profit for TJL, however, was 15%
higher than the previous year, reaching Rs. 956 million for FY2012/13.
Lam attributed this to the strict approach taken towards cost control
during the year.
TJL recorded a finance income of Rs. 33 million for the quarter,
compared to a finance expense of Rs. 112 million during the same period
of the last financial year.