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| Sunday, 25 January 2004 |
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| News Business Features Editorial
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Richard Pieris records growth in profits A strong performance by the retail sector, capital gains from the sale of shares held in Asia Capital and an increased contribution from associate companies have enabled the Richard Pieris Group to achieve a 466 per cent growth in net profits to Rs. 249.7 million for the quarter ended December 31, 2003. Group revenues have increased 14 per cent to Rs. 3.767 million and net profit by 21 per cent to Rs. 356.9 million for the nine month period ended December 31. Annualized earnings per share of the Group has also increased to Rs. 12.09 from Rs. 3.81 a year earlier. The improved economic and business environment that prevailed in the first nine months of the financial year contributed to the strong growth in Group profitability. The retail sector enjoyed a very successful festive season with its three Arpico Super centre at Hyde Park Corner, Dehiwela and Battaramulla recording better revenue growth than anticipated. Contribution from associate companies has increased by 156 per cent stemming principally from the increased income of Dipped Products, Asia Capital and a strong recovery shown by Kegalle Plantations. During the quarter, a capital gain of Rs. 159 million was realised consequent to the divestment of 23.3 million shares held in Asia Capital. During the period under review, the tyre sector improved its profitability with an expansion of capacity and restructuring of its manufacturing operations. Following the introduction of a new range of products, the plastic sector too has performed well while a substantial increase in rubber prices coupled with fierce competition from Far Eastern countries resulted in a decline in profitability of the export sector. The company has announced a bonus issue of one share for every existing share which is to be adopted at an extraordinary general meeting to be held in February. This will increase the total number of issued shares to 59 million. The company made a strategic investment in International Grocers Alliance which holds 40 per cent in the issued share capital and possesses management control in Sathosa Retail Ltd. The shareholding of 19 per cent in International Grocers Alliance further enhances the Group's strong presence in retailing. Currently the company's share is trading at Rs. 160 and has been one of the best performing stocks in recent times at the Colombo Stock Exchange. After adjusting for the bonus issue of one for four announced in July 2003, the company's share price has recorded a 100 per cent appreciation over the past 12 months. |
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