Thursday 20 February 2014

Brown’s revenue and profits fall

By J. Kurukulasuriya

Ceylon FT: Brown and Co PLC the diversified conglomerate in business since 1892, released its interim accounts for the quarter to 31 December 2013, showing a 153% fall in profit to Rs 281 million and a 20% fall in group revenue over the nine-month period.

Group revenues fell 20% to Rs 9,071 million, segment wise, trading activity contributed 66% to the group revenue, followed by plantations which contributed 24%. Investments, which had previously contributed 2% to revenue, fell to around one fifth of 1%. Trading activity was also the most profitable sector. Tourism income was virtually unchanged.

"Other income" showed a 461% increase due to disposal of Brown's shares in Hatton National Bank.

The net gain from this transaction was Rs 1,097 million. Net finance costs showed a marked rise of 54% to Rs 740 million.

A Rs 652 million gain was recognized during the period due to the acquisition of shares by Brown and Co PLC, in SFLS Services Private Ltd., a subsidiary, and this also contributed to 'other income'.

The group disposed its entire shareholding in Royal Fernwood Porcelain Ltd., for Rs 300 million, a gain of Rs 34.1 million.

After the balance sheet date of 31 December, Browns Investments PLC a subsidiary company acquired a holding in Tabrobane Holdings PLC for Rs 190 million on 23 January 2014, bringing its total stake to 20%.

The conglomerate is engaged in several business activities ranging from manufacturing, trading and services, to distribution and is a major supplier of farm machinery and equipment, a distributor of automotive batteries, importer and distributor of hardware, office equipment and veterinary products, plantations, travel and tours and is one of the oldest companies on the Colombo Stock Exchange. The stated capital of the group is Rs 2,005 million, consisting of 70, 875,000 ordinary shares, with the public holding 52%. The share price fluctuated between a high of Rs 99.80 and low of Rs 78.20 during the quarter.

Major shareholders of the company are Engineering Services Pvt Ltd., with 23%, Mason's Mixtures Ltd., with 19%, the Employees' Provident Fund with 10% and Director Shanker V. Somasunderam with 4.4%. The National Savings bank holds 1 million shares.
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