Textured Jersey posts Rs 1bn PAT in FY 2012/13

Textured Jersey Lanka PLC (TJL), has delivered an impressive Rs. 1.02 billion in net profit for the year ended March 31, 2013 (FY2012/13) an increase of 62 % year on year, as per the latest results released to the Colombo Stock Exchange (CSE).

A combination of a strong order book consisting of major customers such as Victoria’s Secret, Marks & Spencer, Intimissimi and Decathlon, improved operational efficiencies and strict control of overheads supported by a strong balance sheet allowed TJL to surpass the Rs. 1bn milestone in net profit for the year. Besides this impressive performance, Textured Jersey has also maintained its generous dividend policy and paid out an interim dividend of Rs. 0.66 per share in March 2013, representing a pay-out of 62% of its 9 month profit ending December 31,2012. Further, its share price has outperformed the ASPI with an increase of 54% during the 12 month period ending May 6, 2013 versus a 13% increase in the ASPI.

For the quarter ended March 31, 2013 (4Q FY2012/13) TJL reported a profit of Rs. 323mn a 48% year-on-year increase.However, as per the release to the CSE by the Chairman of TJL, Bill Lam, although the company achieved improved efficiencies and a better product mix, quarterly margins were affected by a rise in cotton prices and the typical lag in selling price adjustments.As a result, gross profit for the quarter came in at Rs.355mn- a 31% decrease year on year.In addition to this, according to Lam’s statement, during the corresponding quarter last year TJL benefitted from a sharp drop in cotton prices,which makes the year-on-year decline during 4Q FY2012/13, more pronounced. However, on an annual basis, the improved margins during the year resulted in gross profit for FY2012/13 remaining at Rs 1.3bn, a marginal 1.5% below last year’s figure despite revenue for the year being 10.5% lower compared to last year.

Referring to the overheads, Lam said, “TJL maintained a tight control on overheads, reducing administrative expenses by 64% and selling and distribution expenses by 12% in 4QFY2012/13 compared to the same period in the last financial year.”

Despite this, due to the lower quarterly gross profit, TJL’s operating profit for 4Q FY2012/13 was Rs 288mn, a 21% decrease year on year. The annual operating profit for TJL, however, was 15% higher than the previous year, reaching Rs.956mn for FY2012/13. Lam attributed this to the strict approach taken towards cost control during the year.

Additionally, TJL recorded a finance income of Rs.33mn for the quarter, compared toa finance expense of Rs.112mn during the same period ofthe last financial year. In his statement, Lam attributed this to TJL’s strong balance sheet position as at March 31, 2013, with zero long-term borrowings, Rs. 371mn in short-term borrowings compared with Rs.657mn as at March 31, 2012 and a healthy cash balance of Rs 2.21bn.

Mr Lam stated that tight control of overheads and a strong cash position allowed TJL to record a net profit of Rs 323mn for 4Q FY2012/13, up 48% compared with the same period in the last financial year.