Odel posts strong 1Q results

Sri Lanka's fashion and lifestyle retailer, Odel recorded a revenue of Rs 965 million for the three months ending June 30, 2013, down a marginal 4 percent from the corresponding period of the past year.

This was achieved despite the 12 percent Value Added Tax (VAT) imposed on the company's top line in the review period, the impact of which could not be fully countered by sales growth in the quarter, the company said.

The impact of the imposition of VAT on large retailers was, however, mitigated by income from the investment of funds from Odel's December 2012 Rights Issue, which raised Rs 2.5 billion. These funds are invested pending the finalisation of planned expansion projects, a company release stated.

According to interim statements filed with the Colombo Stock Exchange, Odel's profit before tax for the three months grew by Rs 52.3 million to Rs 76.7 million over the corresponding period of the past year,

Gross margin improved by nearly 4.5 percent and the company trimmed finance expenses by 38 percent due to lower interest rates and reduced borrowings through the use of a part of the proceeds of its rights issue.

Due to higher employee and utility costs, administrative expenses increased by 16.6 percent in the quarter reviewed.