Textured Jersey Lanka PLC (TJL) recorded its highest ever annual net profit of Rs.1.3bn for the year ended 31st March 2015, an increase of 16% year on year. This result was achieved on the back of Rs. 512mn net profit for the quarter ended 31st March 2015, representing an impressive 46% year on year increase. The strong quarterly performance enabled the company to conclude the year with a record profit despite the slowdown in sales experienced in the early part of the year, attributed to unusual and extreme weather conditions in the United States.
With demand from its main customers back on track, TJL reported a notable Rs.3.8bn in sales during 4Q FY2014/15, up 16% year on year. Improved demand conditions coupled with recently added capacity enabled TJL to optimize capacity utilisation and product mix to achieve gross profit margins of 15% for 4Q FY 2014/15 compared to 12% during the same quarter last year. This in turn allowed the company to increase its gross profit by 45% to Rs.583mn for 4Q FY2014/15 and drive its annual gross profit to Rs.1.6bn, up 11% compared to the year before.
The strong performance at gross profit level allowed TJL to post an operating profit of approximately Rs.476mn for 4Q FY 2014/15, recording 52% year on year growth at the operating profit level. TJL’s annual operating profit for the year ended 31st March 2015 came in at Rs.1.2bn, 14% higher year on year.
TJL continued to maintain its near debt-free balance sheet as at 31st March 2015, with a net cash position of Rs.1.9bn. Lower interest rates, combined with a marginally lower cash position versus a year before led to net finance income dropping to Rs.14mn for 4Q FY2014/15. The net finance income for the year ended 31st March 2015 came in at Rs.58mn, down 36% compared to the year before.
Despite the reduction in finance income, the quarter concluded with a net profit of Rs.512mn growing 46% year on year. The combined effect of added capacity and strong demand recovery in the latter part of the financial year coupled with solid cost and productivity management enabled TJL to report a record annual net profit of Rs.1.3bn for FY2014/15 despite challenges.
Additionally, during the quarter TJL engaged Ernst & Young to carry out an independent valuation of Ocean India Private Limited and Quenby Lanka Prints Private Limited as a part of the initial discussions to further its acquisition plans. Additional updates will be provided on the outcome of these discussions in due course.
Looking towards the future; recently enhanced capacity and strategic investments coming into fruition will place TJL on a solid growth platform for the coming year. As regional expansion plans move forward to secure TJL’s long term growth trajectory, the prospects of GSP Plus in the future would further augment TJL’s current momentum.
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