First Capital Holdings plc, a Janashakthi Company active in the financial service industry, has posted group revenue of Rs 2.8 billion, up 53.98% from the previous year and an after-tax profit Rs. 984.9 million, up 198.37% from a year earlier translating to an earning per share of Rs. 9.33 against the previous year’s Rs. 3.13 during the year ended March 31, 2015.
The Company’s Chairperson, Ms. Manjula Mathews, attributed the exceptional performance mainly to their primary dealing arm which capitalized on the opportunities offered by the reduction in interest rates in the secondary market.
Additionally, First Capital recorded its highest ever fee income from debt and equity placements reporting an income of Rs. 127 million.
"First Capital’s Debt Structuring and Placement team recorded a business volume of Rs. 22 billion which included a placement of a corporate debenture of Rs. 5 billion, one of the largest debt placements that occurred in the market during the year," she said.
Their corporate finance advisory business had also closed its first private equity placement during the year while their group’s asset management business has tripled its assets under management mainly by the increased volumes from First Capital Wealth Fund, which was the best performing fixed income fund according to statistics of the Unit Trust Association of Sri Lanka.
They had launched three Funds - First Capital Gilt-Edged Fund, First Capital Money Market Fund and First Capital Fixed Income Fund - during the year. They expected these Funds to drive assets under management growth further in the years ahead.
"Both First Capital Equities, now a fully owned subsidiary of the Group and First Capital Markets successfully turned around during the year and began contributing positively to the Group’s bottom line," she said.
The results also included a one-off gain of Rs. 233 million arising from the deemed disposal of shares in the Orient Finance plc which is now accounted for as an associate rather than a financial investment available for sale.
Mathews said that the Group had posted losses of Rs. 294 million on the fair valuation of the financial investments held for trading resulting primarily from the decline in the value of bonds.
She expected the financial services sector growth to moderate from current levels in 2015 amidst political uncertainty. The Central Bank’s key policy rate cuts together with indications for scope for further policy relaxation could imply market rate fluctuation within a relatively low interest low regime, she said.
"As a result, trading gains from the primary dealership are likely to be moderate in the year ahead. The Company will adopt astute strategies to re-position the portfolio to take advantage of trading opportunities with efforts to strengthen the fee-based business in the year ahead," she said.
The Company has a stated capital of Rs. 227.5 million, a risk reserve of Rs. 821 million and retained earnings of Rs.1.2 billion in its books. Total assets ran at Rs. 20.46 billion and total liabilities at Rs.18.13 billion.
Dunamis Capital plc with 45.06%, 25.09% and 4.83% in First Capital in three accounts is the dominant shareholder with Janashakthi owning a further 1.94%.
The First Capital share traded at a high of Rs. 58.60 and a low of Rs. 18.60 during the year under review against a trading range of Rs. 21.60 to Rs.11 the previous year.
An interim dividend of Rs. 2 per share absorbing Rs. 202.5 million for 2014/15 has already been paid and a final dividend of Rs. 2 per share absorbing a further Rs 202.5 had been recommended by the directors for shareholder approval at the forthcoming AGM.
The Directors of the Company are Ms. Manjula Mathews (Chairperson), Dinesh Schaffter (MD), Nihara Rodrigo, Eardley Perera, Ms. Minnette Perera, Nishan Fernando and Chandana de Silva.
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