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Chairman's Review of Textured Jersey
Source: http://www.cse.lk/cmt/upload_report_file/1080_1337854575.pdf
Textured Jersey Lanka PLC (TJL) has enjoyed a positive final quarter in FY 11/12, enabling the company to close the year on a satisfactory note, despite a lack of clarity on the direction of a number of western economies as well as a few domestic setbacks.
Revenue for the full year was Rs. 12.2bn in comparison with Rs. 9.3bn for the previous year, a growth of 31.8%. The final quarter recorded revenue of Rs. 3.1bn, up 21.1% over the corresponding quarter of 2010-11. The policy of strengthening the company’s customer base has been beneficial for TJL whilst its longstanding relationships with key customers have also been a valuable asset in uncertain times.
Gross profit margins for the quarter improved to 16.7%, a significant growth from 12.9% over the 4th quarter of the previous year. A sharp drop in cotton prices during the latter part of the financial year and effective inventory management enabled this improvement in gross profit. Gross profit for the year closed at Rs. 1.3bn, a growth of 22.7%, compared to the previous financial year.
Selling and Administrative overheads stood at 4.1% of sales for the full year in comparison to 3.9% during the previous financial year. The strong performance in revenue during the period enabled a 13% growth in operating profit for the full year to Rs. 828 mn and a substantial 44% growth to Rs. 364mn for the final quarter.
Net finance costs for the quarter stood at Rs. 112mn up from Rs. 8mn over the same quarter of the previous year. The figure for the full year was Rs. 167mn as against Rs. 25mn in FY 10/11. These costs were largely due to an unrealised exchange loss of Rs. 110mn for the quarter and Rs. 152mn for the year, arising from the sharp depreciation of the Sri Lanka Rupee during the last quarter of FY 11/12. Excluding this adverse impact, net finance costs recorded a reduction year on year. Total current borrowings of the company declined from Rs. 2.3bn in FY 10/11 to Rs. 0.7bn at the close of the year whilst the cash balance at the close of the year was Rs. 1.2bn in comparison with Rs. 22mn in FY 10/11.
Consequently, net profit for the year, excluding unrealised exchange losses, grew by 14% to Rs. 780mn for FY 11/12 and by 47% to Rs. 328mn for the final quarter. Cumulative reported net profit for the year after unrealised exchange losses stood at Rs. 628mn, a drop of 8% from the previous financial year.
The previous green-field expansion plans of the company are now being looked at in a different light, and management is currently actively pursuing its policy of inorganically expanding within the region via an acquisition of an existing facility. Acquisition of operational facilities, which may be now available at a reasonable price following last year’s industry upheavals, should provide a faster return than organic expansion. Management is also actively looking at setting up a coal/bio mass boiler in order to offset the negative impact of the recent furnace oil price increase. With cotton prices falling to their lowest levels since February 2010, effective inventory management will also remain a priority for the company. Management remains confident of delivering positive results during the new financial year
Revenue for the full year was Rs. 12.2bn in comparison with Rs. 9.3bn for the previous year, a growth of 31.8%. The final quarter recorded revenue of Rs. 3.1bn, up 21.1% over the corresponding quarter of 2010-11. The policy of strengthening the company’s customer base has been beneficial for TJL whilst its longstanding relationships with key customers have also been a valuable asset in uncertain times.
Gross profit margins for the quarter improved to 16.7%, a significant growth from 12.9% over the 4th quarter of the previous year. A sharp drop in cotton prices during the latter part of the financial year and effective inventory management enabled this improvement in gross profit. Gross profit for the year closed at Rs. 1.3bn, a growth of 22.7%, compared to the previous financial year.
Selling and Administrative overheads stood at 4.1% of sales for the full year in comparison to 3.9% during the previous financial year. The strong performance in revenue during the period enabled a 13% growth in operating profit for the full year to Rs. 828 mn and a substantial 44% growth to Rs. 364mn for the final quarter.
Net finance costs for the quarter stood at Rs. 112mn up from Rs. 8mn over the same quarter of the previous year. The figure for the full year was Rs. 167mn as against Rs. 25mn in FY 10/11. These costs were largely due to an unrealised exchange loss of Rs. 110mn for the quarter and Rs. 152mn for the year, arising from the sharp depreciation of the Sri Lanka Rupee during the last quarter of FY 11/12. Excluding this adverse impact, net finance costs recorded a reduction year on year. Total current borrowings of the company declined from Rs. 2.3bn in FY 10/11 to Rs. 0.7bn at the close of the year whilst the cash balance at the close of the year was Rs. 1.2bn in comparison with Rs. 22mn in FY 10/11.
Consequently, net profit for the year, excluding unrealised exchange losses, grew by 14% to Rs. 780mn for FY 11/12 and by 47% to Rs. 328mn for the final quarter. Cumulative reported net profit for the year after unrealised exchange losses stood at Rs. 628mn, a drop of 8% from the previous financial year.
The previous green-field expansion plans of the company are now being looked at in a different light, and management is currently actively pursuing its policy of inorganically expanding within the region via an acquisition of an existing facility. Acquisition of operational facilities, which may be now available at a reasonable price following last year’s industry upheavals, should provide a faster return than organic expansion. Management is also actively looking at setting up a coal/bio mass boiler in order to offset the negative impact of the recent furnace oil price increase. With cotton prices falling to their lowest levels since February 2010, effective inventory management will also remain a priority for the company. Management remains confident of delivering positive results during the new financial year
Source: http://www.cse.lk/cmt/upload_report_file/1080_1337854575.pdf
