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| Tuesday, 12 October 2004 |
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Lanka Tiles net profit up 5.3% to Rs. 138.8 million Lanka Tiles Limited recorded a Rs. 138.8 million net profit for the financial year ended March 31, 2004. This growth in profit corresponds to a 5.3% increase and Group turnover rose 21.3% to Rs. 1,184 million. The company attributes management skills and marketing strategies adopted and the positive economic situation as positive factors for the growth in profit. Chairman of Lanka Tiles Ltd Anthony A. Page said that the year under review could be considered satisfactory as Group turnover rose 21.3% to Rs. 1,184 million whilst profit after tax moved up 5.3% to Rs. 138.8 million. Gross profit in absolute terms was a marginal increase, from Rs. 333.8 million to Rs. 340.8 million, only because of a 6% decline in margins.
"Net finance cost increased by Rs. 11.2 million mainly due to increased borrowings to finance investment in new machinery. After meeting the cost of borrowing for this expansion the Group posted a profit after tax of Rs. 138.8 million, the highest in its 20 year history. I consider the efforts of the management in this respect laudable.At the time of writing, the Group has succeeded in selling the entirety of this additional production and is considering an investment of Rs. 130 million to further expand production", Page said. The Company commissioned as scheduled the new machinery installed at a cost of Rs. 425 million consisting of a modern kiln and a state-of-the-art sorting machine. New tiles introduced to the market with improved quality were well received by the customers. Customer acceptance of new tiles introduced to the market has encouraged us to continue with its plans to introduce the latest technology to the factory", he said. The Company invested Rs. 21 million to acquire 31.3% of the issued share capital of Parquet (Ceylon) Limited (PCL) which was in financial and operational difficulty. The rationale for this investment was that PCL's wood flooring business would complement the Company's operations. PCL has since shown significant improvement in operations and I am confident that it will make a positive contribution to the Company results in 2004/2005," he said. The Company paid an interim dividend of 15% out of current year's profit in March 2004. A resolution to pay a further dividend of 17% in the current year will be proposed at the forthcoming Annual General Meeting. The Company has successfully weathered short term setbacks in economic and business environments in the past to record increasing profits for seven consecutive years. This demonstrates, amply, the swiftness with which our Company has been able to respond to change. I forecast the year ahead to pose more challenges to the Company chiefly, emanating, from persistent rise in energy costs, intensifying Global competition and changing domestic outlook vis-a-vis socially, politically and economically. The Company also had to contend with a policy regime that not only, distinctly favours imports as against local industries but also imposes unrealistic conditions in mining raw materials needed for the industry. I am reasonably confident that the Group will post a significant growth in profit this year," he said. Managing Director of Lanka Tiles, P. M. Jayasekera said that despite the challenges faced, the Company succeeded in sustaining the trend of improving profitability, year on year, in the year 2003/2004 as well. (SP) |
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