Kshatriya transforms into Dunamis Capital after profitable '09-10

A period of strategic business rationalization has turned around the fortunes of Kshatriya Holdings in 2009-10, prompting the diversified business group to begin the new fiscal year as Dunamis Capital PLC, a name that embodies the 'power within' the restructured entity.

Shareholders of the Group, which includes First Capital Holdings PLC and Kotmale Holdings PLC, recently endorsed the adoption of the new name in acknowledgement of the dynamism and growth envisaged following the internal initiatives to re-focus on strong and profitable core businesses.

Figures filed with the Colombo Stock Exchange this week attest to the success of the strategy, with Dunamis Capital converting a loss of Rs 394.5 million in 2008-09 to a profit after tax of Rs 368.7 million for the year ending March 31, 2010.

Consolidated profit before tax was Rs 883.9 million, as against a pre-tax loss of Rs 187 million reported the previous year, while turnover grew 38 percent to Rs 3.78 billion. Equity holders of the parent company who were handed a loss of Rs 454 million a year ago received an attributable profit of Rs 127 million in the year under review.

The Group's earnings per share totalled Rs 1.29 as at March 31, 2010, in contrast to a negative Rs 4.61 in the previous year.

Principal contributors to revenue were Financial Services (the First Capital Group) and Dairy (Kotmale Holdings) with Rs 2.68 billion and Rs 1 billion respectively.

These two sectors also contributed Rs 505 million and Rs 45.4 million to profit after tax.

Group Managing Director Manjula Mathews said a series of hard decisions, to dispose of unprofitable businesses, stem the flow of losses, reduce staff and sell assets, combined with strategic investments in the profitable areas of business were largely responsible for the turnaround.

Over the past two years, the Group disposed of its interests in retailing (Magna Supermarkets) and apparel (garment washing plants in India and Sri Lanka) reduced its debts, pruned overheads, reduced staff and made capital investments to strengthen its companies in financial services and dairy, equipping and positioning them for growth in competitive environments.