Textured Jersey records Rs 1.2b net profit

Textured Jersey Lanka PLC (TJL) reported a strong 14% year-on-year growth in net profit to Rs. 1.2 billion for the year ended March 31, 2014, supported by robust growth in turnover.

The company's strong cash position has allowed TJL to maintain its trend of generous dividend pay-outs with Rs. 0.80 per share being declared as the final dividend for FY 2013-14.

This boosted the total dividend for the year to Rs. 1.30 per share representing an impressive pay-out of 74% of total net profit.

According to Chairman, Textured Jersey, Bill Lam, the company managed another year of impressive results despite recent adverse weather conditions in the United States, softening retailer demand growth.

Sales reached Rs. 12.7 billion, 16% higher than that of last year. The company maintained its gross margin for FY2013-14 at 11% levels, and achieved a 15% year-on-year growth in gross profit amounting to Rs. 1.5 billion.

The gross profit for 4Q, FY2013-14 also increased 14% year-on-year reaching Rs. 403 million. The same trend continued at the operating profit level, with FY2013-14 margins maintained at around 8%, with Rs. 1.1 billion reported as the annual operating profit, up 10% year-on-year.

This annual operating profit was achieved on the back of a strong quarterly profit of Rs. 313 million for 4Q, FY2013-14 up 9% year-on-year.

TJL's strong cash generation has enabled it to maintain a near debt-free balance sheet and a healthy cash position.

The company recorded Rs. 91 million in finance income for FY2013-14, representing a substantial 15% growth year-on-year. As per the results released, the company had no borrowings and a strong cash position of Rs. 2.1 billion as at March 31, 2014.

Net profit for 4Q, FY2013-14 was Rs. 352 million, representing a growth of 9% year-on-year. Net profit for the year ended March 31, 2014 displayed a strong 14% year-on-year growth pushing up net profit to Rs. 1.2 billion.

The 10-12% capacity added through the modernisation and expansion project will be used during Q1, FY2014-15. With the revised timelines, the multi-fuel boiler plant should be in operation in Q2, FY2014-15.

According to a statement released to the CSE by Lam, "The envisaged cost savings from the multi-fuel boiler plant and the added capacity, places TJL on a strong footing for future profit growth".

He said that TJL's orders for the first quarter of FY2014-15 remains healthy due to the strong European order book which will offset the cautious outlook of US retailers.

Lam said that some US retailers had taken a cautious approach for a few months, softening the demand on TJL's US business. Despite this, TJL's European order book continues to be strong, thereby mitigating the overall impact.

The management remains confident of another year of impressive growth, as the business has already recovered from the temporary impact in the first quarter.

Lam said that a strong year of results combined with the implementation of key strategic initiatives would add tremendous value to the shareholders and act as a platform for continuous future growth for the company.