Touchwood net profits soar to Rs. 163 m for 2004/05

Touchwood which commenced operation in 2001 has recorded a phenomenal growth for the financial year 2004/05 ending March 31, 2005. The net profit for the period is Rs. 163 m in comparison to Rs. 35 m for the previous year.

This is an increase of 407%. The earnings per share had shot up from Rs. 14.45 to Rs. 72.97 and the net assets per share from Rs. 21.29 to Rs. 102.72. The revenue has increased to Rs. 549 M which is an increase of 134%.

The company's core business is growing trees that are commercially viable and environmentally friendly providing a sound investment opportunity for investors. The total area under plantation is 923 acres up from 550 acres last year. At present the company's main focus is on Mahogany, Vanilla and Sandalwood Plantations.

The company has 18 forest locations covering various parts of the country and 287,000 trees have been planted.

The Touchwood Company is part of Touchwood Group now in operation in Dubai, Thailand and Hongkong. Chairman R.A. Maloney in his annual report said that the performance had exceeded its forecast and expects the annual profits to accelerate in coming years.

The accounting policies of the company have been changed in order to show a more realistic picture in accordance with the Sri Lanka Audit Standards and audited by KPMG Ford, Rhodes, Thornton and Co.

The company share price has been traded at a high of Rs. 272 recently and current price of Rs. 192.50 (15/09/05) has a price earning ratio of only 2.63 one of the cheapest shares in the stock market.

Considering the present overall price earnings ratio of 15.33 current price is highly undervalued and has huge upside potential. The company has recently declared a bonus of 3 for 1 and even on a diluted share capital would still have a earnings per share of Rs. 18.62.