Despite challenging market conditions, Central Finance Company PLC, perhaps the strongest finance companies in business in the country, has sustained profitability at the previous year’s level in the year ended March 31, 2014 boosting total assets by 15%, total deposits by 21% and shareholders’ funds by 23%.
"I am indeed pleased to note that despite obvious challenges, the company succeeded in consolidating its activities and delivering consistent performance throughout the year," CF Chairman J.D. Bandaranayake said.
The company’s total assets stood at Rs.61.57 billion during the year under review, deposits at Rs.33 billion and shareholders’ funds at Rs.17.93 billion.
The company’s Managing Director, Mr. E. H. Wijenaike, noted that despite intense competition the strength of the CF brand was reflected the healthy growth in deposits which had increased from Rs.27.26 billion in April last year to Rs.33 billion in March 2014.
"Our key deposit strategy was to shift investor preference from short term investments to longer term alternatives throughout new initiatives launched during the year," he said.
Wijenaike reported that the company moved to minimize the mismatch between assets and liabilities and make use of the low interest rate environment by securing long-term borrowings. This included the launch of two debentures of Rs.2 billion each in June and December 2013 with tenures ranging from three to five years.
"Testament to our investor confidence, the issues were oversubscribed on the first day of each issue by 4.3 and 7.5 times, respectively," he said. "Both issues are listed on the Colombo Stock Exchange providing tax free returns to the investors."
"I am indeed pleased to note that despite obvious challenges, the company succeeded in consolidating its activities and delivering consistent performance throughout the year," CF Chairman J.D. Bandaranayake said.
The company’s total assets stood at Rs.61.57 billion during the year under review, deposits at Rs.33 billion and shareholders’ funds at Rs.17.93 billion.
The company’s Managing Director, Mr. E. H. Wijenaike, noted that despite intense competition the strength of the CF brand was reflected the healthy growth in deposits which had increased from Rs.27.26 billion in April last year to Rs.33 billion in March 2014.
"Our key deposit strategy was to shift investor preference from short term investments to longer term alternatives throughout new initiatives launched during the year," he said.
Wijenaike reported that the company moved to minimize the mismatch between assets and liabilities and make use of the low interest rate environment by securing long-term borrowings. This included the launch of two debentures of Rs.2 billion each in June and December 2013 with tenures ranging from three to five years.
"Testament to our investor confidence, the issues were oversubscribed on the first day of each issue by 4.3 and 7.5 times, respectively," he said. "Both issues are listed on the Colombo Stock Exchange providing tax free returns to the investors."
The directors have recommended a final dividend of Rs.1.50 per share giving shareholders a total return of Rs.3.20 per share for the year under review, up 10% from the previous year.
The year saw the full impact of the duty hike on imported vehicles with a drastic decline observed in the demand for private vehicles which in turn hurt the business of financing such vehicles.
Also, the financing of construction vehicles and equipment which was at its peak in 2012/13 also dropped sharply amidst severe financial difficulties faced by the construction sector in the face of persistent delays in collections.
"Consequently sector specific NPLs’ also shot up, prompting the company to reduce the exposure to the sector," the report said.
Challenges faced by the construction, transportation and tourism sectors throughout the year under review together with economic challenges posed throughout the year inevitably exerted cash flow pressures on CF customers in these business segments.
"Consequently, recoveries from these three sectors remained particularly challenging throughout the year," the report said. "As industry-wide NPL’s shot up, CF embarked on a strategic realignment agenda to progressively ease the company’s exposure to these sectors in the longer term,"
CF has a stated capital of Rs.568.4 million, capital reserves of Rs.1.9 billion, a reserve fund of Rs.1.08 billion and investment fund of Rs.732.7 million and revenue reserves of Rs.13.59 billion. Total assets of the company ran at Rs.61.57 billion and total liabilities at Rs.43.6 billion.
The year saw the full impact of the duty hike on imported vehicles with a drastic decline observed in the demand for private vehicles which in turn hurt the business of financing such vehicles.
Also, the financing of construction vehicles and equipment which was at its peak in 2012/13 also dropped sharply amidst severe financial difficulties faced by the construction sector in the face of persistent delays in collections.
"Consequently sector specific NPLs’ also shot up, prompting the company to reduce the exposure to the sector," the report said.
Challenges faced by the construction, transportation and tourism sectors throughout the year under review together with economic challenges posed throughout the year inevitably exerted cash flow pressures on CF customers in these business segments.
"Consequently, recoveries from these three sectors remained particularly challenging throughout the year," the report said. "As industry-wide NPL’s shot up, CF embarked on a strategic realignment agenda to progressively ease the company’s exposure to these sectors in the longer term,"
CF has a stated capital of Rs.568.4 million, capital reserves of Rs.1.9 billion, a reserve fund of Rs.1.08 billion and investment fund of Rs.732.7 million and revenue reserves of Rs.13.59 billion. Total assets of the company ran at Rs.61.57 billion and total liabilities at Rs.43.6 billion.
Net assets per share had grown to Rs.171.01 from Rs.138.81 and the CF share traded at a high of Rs.194.90 and a low of Rs.171.10 during the year. This compared with a trading range of Rs.185 to Rs.121 the previous year.
Corporate Services (Pvt) Ltd with 16.11% is the biggest individual shareholder of the company followed by Mr. E.H. Wijenaike (15.41%) and the EPF (10.04%), up from 7.55% the previous year. The ETF also owns 1.14%.
The directors of the company are: Messrs. J.D. Bandaranayake (Chairman), E.H. Wijenaike (MD), G.S.N. Peiris, R.E. Rambukwelle, A. K. Gunaratne, D.P. de Silva, C.L.K.P. Jayasuriya, S.C.S. Wickramasinghe, F. Mohideen and A.N. Fernando.
www.island.lk
Corporate Services (Pvt) Ltd with 16.11% is the biggest individual shareholder of the company followed by Mr. E.H. Wijenaike (15.41%) and the EPF (10.04%), up from 7.55% the previous year. The ETF also owns 1.14%.
The directors of the company are: Messrs. J.D. Bandaranayake (Chairman), E.H. Wijenaike (MD), G.S.N. Peiris, R.E. Rambukwelle, A. K. Gunaratne, D.P. de Silva, C.L.K.P. Jayasuriya, S.C.S. Wickramasinghe, F. Mohideen and A.N. Fernando.
www.island.lk
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