Hayleys posts PBT Rs 4.8 b in FY 2011-12

Hayleys Group has posted its best annual earnings in the history of the 134 year old conglomerate, tripling net profit in FY 2011-12. With its Agriculture, Hand Protection, Purification and Transportation sectors turning in particularly strong performances, the Group improved turnover to Rs 62.5 billion, growing by Rs 8.1 billion or 15 percent over the 12 months ending March 31, 2012.

Pre-tax profit more than doubled to Rs 4.8 billion, and profit after tax grew 238 percent to Rs 3.8 billion, the Blue Chip conglomerate said in a filing with the Colombo Stock Exchange. While capital gains of Rs 2.3 billion contributed substantially to these results, profit before tax from operations excluding capital gains reflected a growth of 23 percent.

Profit attributable to equity holders of the company increased from Rs 677 million in 2010-11 to Rs 2.5 billion for the year under review.

The Board of Directors of Hayleys PLC has proposed a dividend of Rs 4 per share, payable in July 2012.

Hayleys Chairman Mohan Pandithage said most sectors made positive contributions to the Group’s earnings in the concluded financial year. “It is satisfying to note that our performance is a reflection of a number of strategic actions taken in recent years,” he said.

“A fundamental change that was implemented in 2009 was the policy that Hayleys will focus on investments in which we have ownership and management control, and exit passive stakes. This was done to exercise more control over our income streams, and this approach is now reaping rewards.” “Our broad strategy in recent years has been to drive innovation and value addition in our core businesses and strategically enter into new growth areas that have emerged in post war Sri Lanka,” Pandithage said.

He said this is reflected in the Group’s performance in the year reviewed, with major contributions to earnings from the Hand Protection (32 percent of PBIT), Agriculture (19 percent of PBIT), Purification (13 percent of PBIT) and Transportation (9 percent of PBIT) sectors.

“In all our core business areas, we have mastered the business, grown organically and become leaders on the national as well as the global stage,” Pandithage said. “Hayleys has consciously taken strong positions in industries that have strong future growth potential based on long term economic and socio-political trends.”

“At the same time, the management is well aware that with a paradigm shift in the Sri Lankan economy since 2009, there are new growth areas in the economy that the Group ought to have exposure to. It is well established that the leisure sector will be a major growth area in Sri Lanka in the next decade,” he said, pointing out that the exposure of Hayleys to the leisure sector is holistic, ranging from hotel ownership, management, travel agency and tour operations.

The recent acquisition of the Amaya Group has already brought in significant earnings and also brings in synergies in resort management. With the refurbishment of the Continental Hotel, Hayleys will have a modern and diverse leisure portfolio, well positioned to take advantage of the impending tourism boom, Pandithage said. Hayleys investments in wind power and mini-hydro power are also expected to add to the Group’s bottom line in years to come.