Renuka City Hotels PLC, a largely family-owned and family-run business although quoted on the Colombo Stock Exchange, has posted what its Chairman, Mr.R. B. Thambiayah, called "another year of remarkable performance with a 90% occupancy level and an impressive profitability of Rs. 398 million."
This was up from Rs. 299.6 million the previous year and included substantial other operating income from the company’s valuable quoted share portfolio of Rs. 186.1 million, up from Rs. 67.5 million a year earlier.
The share portfolio costing Rs. 865.2 million had a market value of Rs. 2.31 billion as at March 31, 2015.
Thambiayah reported that the current tourism boom with strong growth in arrivals has created a hype and established great expectation in the future of the hotel industry resulting in a rapid over expansion of hotel rooms, especially in Colombo.
"Approximately 2,000 rooms were expected to be added to the capacity of rooms in Colombo in 2014/15," he noted.
While optimism and investment in hospitality ventures is welcome, he said there must be parallel infrastructure development such as roads, highways, rail network etc to drive this growth momentum.
"Museums, zoological gardens, elephant orphanages and historical attractions are an amusement of the past. The modern traveler looks for experiential tourism. This is the era of interaction. Our challenge is to adopt the latest methodology to be a competitive tourist destination and to outdo the neighbouring countries by transforming yesterday’s amusement to modern day attractions," he said.
Thambiayah urged that the increase in the number of rooms in the island should be better planned and dispersed within the country based on location and demand so that unhealthy price wars would not materialize.
He also stressed the need to see a real increase in the number of flights in and out of the country to facilitate the increase in tourist arrivals.
"The time has come for our industry to press the government to move forward with identified planned positive initiatives upto completion and work closely to initiate new strategies for continuous evolving attractions to drive the tourism industry to world class levels. It’s time we redirect our tourist back to Sri Lanka from Singapore, Malaysia, Maldives and similar destinations that have overtaken us over the years," he said.
He also urged that we should carry out strong promotional activities to bring back hospitality professionals who have left our shores for various reasons.
Many of them who have been overseas for a number of years now, may be more than willing to return to Sri Lanka with the required expertise, experience, knowledge and resources given the right opportunities and incentives.
"It is beneficial to identify their requirements and arrange a framework to assist their return," he said.
Renuka City Hotels incorporated in 1992 runs a four-star property on Galle Road, Kollupitiya adjacent to the original Renuka Hotel which is not quoted company.
The Directors have proposed a final dividend of Rs. 6 per share, up from Rs. 4 per share a year earlier.
The company, with a stated capital of Rs. 110 million, a general reserve of Rs. 2.51 billion, an available sale reserve of Rs.1.45 billion and retained earnings of Rs. 353.5 million has total assets of Rs.4.5 billion and total liabilities of Rs. 75 million in its books.
Renuka Hotels Ltd with 62.22 % followed by the related Cargo Board Development Company (6.51%) and J.B Cocoshell (4.63%) are the top shareholders. Several related companies are also among the top 20 shareholders.
Net asset per share had grown to Rs 632.18 during the year from the previous year’s Rs 498.35. The Renuka City share traded between a high of Rs. 374 and a low of Rs 256 during the year under review and closed at Rs. 310.
The Directors of the Company are Messrs R.B. Thambiayah (Chairman), Mrs. N.A. Thambiayah (Deputy Chairman) Ms. S.R. Thambiayah and A.L Thambiayah (Joint MDs), Mrs. M.A Jayawardene, R.S. Tissanayagam, C.S Wijeyaratne and Ms. N.R Thambiayah.
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