Aitken Spence posts Rs. 2.8b profit for 2007/08

Aitken Spence posted a remarkable 26% growth in profits attributable to shareholders over the previous year, despite an adverse and challenging environment faced by both the national and global economies.

In its annual results released to the Colombo Stock Exchange for the financial year 2007/08, the diversified bluechip revealed its annual profit-after-tax figure rising 24% to Rs 2.8 b and group revenue surging 39% to Rs 27.5 b.

"Our pioneering spirit and vision enabled us to forge strategic alliances and achieve sustained growth. Through evolution and innovation, Aitken Spence has successfully gained greater profitability and market growth", Deputy Chairman and Managing Director of Aitken Spence & Co. PLC, J M S Brito said.

Earnings per Share stood at Rs 68 while the Return on Equity was a commendable 17%.

The Group which has invested extensively in the Sri Lankan tourism industry saw restricted profitability and potential returns from its local resorts.

"However, we strongly believe in the country's great potential and remain optimistic on the dawn of peace. The Sri Lankan economy has proven to be resilient and we see opportunities to continue investing heavily." Brite said.

He continued, "Despite growing difficulties, the Sri Lankan hotels operations posted a noteworthy decline in losses during the year which was a creditable achievement bearing in mind the low occupancies and the high debt service cost burdening the hotel properties.

The lack of high yield travellers compounded by intense competition amongst beach properties, rising wages and energy costs further constricted profitability."

Aitken Spence strengthened its overseas operations in the hospitality sector with the commencement of hotel management ventures in growing markets of India and Oman, in addition to new investments in the Maldives.

The Group's destination management division, another industry leader, performed commendably by innovatively targeting emerging markets where travellers were less susceptible to adverse international publicity.

The company noted that external factors such as rising global energy prices translated into higher operational costs especially for businesses dependent on transportation related services.

Given escalating costs in utilities and transport, the integrated logistics and freight forwarding divisions of the Group posted a commendable year of profitability, outperforming their competition through differentiation by means of enhanced quality and value added services offered.

"The suspension of the multi country consolidation activity outside the Port of Colombo adversely affected our integrated logistics division. This is an issue of concern as not only has this eliminated a stream of revenue to the division but to the entire country whilst having an adverse impact on the hub status of the Port of Colombo", Brito said.

During the year under review, Aitken Spence, recognising the role of human resources as its key driver of growth now and in the future, has taken decisive steps to benchmark itself as a model employer with initiatives that would permeate throughout the Group.

The company continued to embed the values of its brand identity with a strong focus on living the brand.

"For the future, we would continue to explore opportunities in growth areas of the economy, in the true spirit of dynamism and innovation that we have inherited through our 140 years of existence", Brito said.