JKH share robust says Asia Securities

Ravi LADDUWAHETTY

Share market analysts firmly believe that the share of premier diversified blue chip John Keells Holdings PLC, which took a dip following the Supreme Court ruling on Lanka Marine Serviced Ltd, was yet robust.

“In the event of a worst case scenario where there will be losses of back taxes for the JKH Group on behalf of the Lanka Marine Services Ltd of an estimated Rs. 1.65 billion, that loss could be partially mitigated by the Capital Gains of Rs. 1 billion that the JKH Group made through the sale of the 20% stake in Associated Motorways, Asia Securities told Daily News Business yesterday.

They said despite the losses of the LMSL transaction being around Rs. 2 billion with the additional contingency of Rs. 375 million penalties, the net cost was only Rs. 650 million with the differential of the Rs. 1.65 billion mitigated by the Rs. 1 billion Capital Gains through the AMW sale. JKH was very likely to appeal against the Rs. 375 million penalty and even it was payable, it was not applicable in any case for the financial year 2008/2009.

They further said that the JKH share continued to be strong with a projected 8% Year on Year Growth with a projected Rs. 5.5 b post tax profit for 2009/2010 with the projected growth being the leisure sector will a post tax profit of Rs. 480 million, largely attributed to the growth of the diversified group’s Maldivian resorts.