Thursday 29 May 2014

Dunamis Capital posts net profit of Rs. 121.5 m

Dunamis Capital PLC has reported profit after tax of Rs. 121.5 million for the year ending 31 March 2014.

The holding company of First Capital, Kelsey Homes and Premier Synthetic Leather, Dunamis said consolidated revenues had declined by a marginal 7% to Rs. 1.8 billion.
Financial Services recorded net profit of Rs. 340 million for the year reviewed, while Property Development converted a net loss of Rs. 55 million in 2012-13 into net profit of Rs. 148.6 million, the company said in a filing with the Colombo Stock Exchange.

During the year under review the company invested Rs. 600 million in Kelsey Homes to fund the purchase of a six-acre property in Mount Lavinia and Rs. 200 million in Premier Synthetic Leather, the only synthetic leather manufacturer in Sri Lanka.

The latter incurred a pre-operational expense of Rs. 53 million which impacted the group’s bottom line, but is expected to commence commercial production in the first quarter of 2014-’15 and break even in the current financial year, Dunamis Capital’s Managing Director Manjula Mathews said.

Reviewing the operations of the Group, she said the lower profit reported by the Financial Services segment was primarily due to the absence of opportunities to realise the significant gains of the previous year through the sale of investment securities.
Administration expenses had more than doubled to Rs. 266.6 million as the financial services subsidiary enhanced the profile of staff and moved offices to a more appropriate location to achieve its long-term growth objectives, Mathews said. The year under review also saw the consolidation of First Capital Equities, a stockbroking company acquired in June 2013.

Looking ahead, Mathews said early sales of the new development of Kelsey Homes show promise, and the company expects demand for housing to increase over the next financial year in a low interest rate environment. “Kelsey has identified further properties for launch in the forthcoming financial year and expects a significant improvement in the company’s performance.”

“We also expect to see growth in financial services in the year ahead, especially in the structuring and placement of corporate debt securities given the tax incentives and the underlying low interest rate regime. There will also be increased focus on the corporate advisory business,” Mathews added.

The Dunamis group’s current holdings encompass interests in Financial Services (First Capital), Property Development (Kelsey) and Manufacturing (Premier Leather).
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