Textured Jersey continues growth trajectory
Textured Jersey Lanka PLC (TJL) reported a net profit of Rs. 206 mn
for the quarter ended June 30, 2015(1Q FY 2015/16), an overall profit
growth of 26% year-on-year.
Chairman, TJL, Bill Lam said the company achieved two key strategic
milestones during the year; acquiring Ocean India (Pvt) Limited (OCI)
and Quenby Lanka Prints (Pvt) Limited (QLP). During 1Q FY2015/16,
pursuant to the conclusion of all legal and regulatory formalities, TJL
consolidated QLP as a wholly-owned subsidiary of TJL with effect from
June 1, 2015.
Accordingly in 1Q, FY 2015/16 TJL recorded consolidated revenue of Rs.
2.8 bn with a net profit of Rs. 206 mn creating a platform for synergies
and further growth in value added products. For the period ended June
30, 2015, on a standalone basis, TJL recorded a net profit of Rs. 189 mn
up 15% year-on-year.
This result was achieved on the back of a topline of Rs. 2.7 bn
representing a 2% year-on-year increase, while the gross profit was
Rs.297 mn, up 36% compared to the corresponding period last year.
The increase in gross profit could be directly attributable to the
improved margins achieved during the quarter under review. Standalone
TJL gross profit margin for 1Q, FY2015/16 was at 11% compared to 8%
during the corresponding period last year.
According to Lam, this reflects the impact of the previously expanded
manufacturing capacity now translating to bottom line margins. With QLP
results being consolidated with effect from June 1, 2015, the
consolidated gross profit for TJL for the quarter ended June 30, 2015
was Rs. 323mn.
Lam said that despite the increase in administrative expenses due to
systems and processes being strengthened to accommodate the planned
expansion strategy, the strong performance at gross profit level allowed
TJL to post an operating profit of Rs.171mn for 1Q, FY 2015/16,
recording 39% year-on-year growth on a standalone basis. On a
consolidated basis, TJL reported an operating profit of Rs. 188 mn.
TJL continued to maintain a strong balance sheet as at June 30, 2015,
with Rs.3.4 bn in cash and zero long-term debt.
However, Rs.1.4 bn of short-term debt was added to manage and
optimize the timing effects of cash flows and investments. Despite the
better cash position compared to a year earlier, lower interest rates
led to net finance income dropping 51% to Rs. 8.7 mn compared to 1Q,
FY2014/15.
The combined effect of improved gross margins and diligent overhead
management enabled TJL to report a strong bottom line performance
despite reductions in net finance income. TJL concluded the quarter
under review with a net profit of Rs.189 mn on a standalone basis,
growing 15% year-on-year, which resulted in a consolidated net profit of
Rs. 206 mn. |