Sunday 7 December 2014

ACAP eyes leisure, but passive to stock broking

By Azhar Razak

The Chairman of Asia Capital Plc (ACAP), J H P Ratnayeke says that given the docile stock market environment, it is likely that the group would remain only passive participants in the stock broking sector, until such time a conducive environment develops to compel aggressive involvement in developing ist prospects in that space. Presenting his message to the stakeholders in the Annual Report 2013/14 released last week, Ratnayeke said that with the campaign to deepen their exposure in the leisure sector being the main thrust of their medium term plans, the group has additionally mapped out suitable strategies that justify the development of its other business interests as well.

“On the investment banking side, we are committed to play an active role in exploring the diversity of the segment, in particular the corporate finance space, as we strive to re-engineer ourselves as a multi-functional investment banking unit ideally positioned to complement the progressive development of the national economy,” the Chairman said.

Commenting on the stock broking sector, Asia Capital Plc Group Director/CEO Stefan A Abeyesinghe said that following a relatively sluggish start to the year, the performance of the ACAP Stock Broking arm showed promising results in the latter half of the financial year.

“The country’s stock markets rebounded well in December 2013 in the lead up to a buoyant market conditions seen in the first quarter of 2014. Stock Broking arm was thus able to secure a notable reduction in the sector losses from Rs.134 million in the previous year to Rs.84 million as at 31st March 2014,” he said.

With regard to the Stock Broking arm, Abeysinghe said the group expects to maintain its established presence while investigating the possibility of diversifying interests into related business segments, where strategic equity partnerships or business tie-ups with stakeholders who have a vested interest in Sri Lanka’s securities industry would be sought.

“While complementing the group expansion goals, equity based tie–ups of this nature are deemed to limit ACAP’s capital outlay while supporting the long-term debt management strategies of the group,” he explained.

During the year ended 31st March 2014, the ACAP group recorded a 14% reduction in the group loss from Rs.727 million in the previous year to Rs.622 million as at 31st March 2014 helped by a 7% growth in its topline.

Abeysinghe further noted that the heightened focus on developing the leisure arm would tantamount to both short-term and medium-term commitments by ACAP to enhance the current room inventory.

“With the expansion drive well underway and much of the financial commitment already made for a number of pipeline projects, the leisure management arm is on course to accomplish the set deliverables in terms of room capacity by 2017. Moreover, it is likely that in seeking to better manage properties under the leisure sector, a possible re-branding exercise would be initiated to consolidate all properties under a single umbrella. Such measures would undoubtedly be associated with further capital raising
strategies that would yet again reconstitute the composition of the group’s equity holdings in the years ahead,” the Director/CEO emphasized.
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