First Mini Mall opened in Gampaha, more to follow
CT Holdings PLC, originally Ceylon Theatres Ltd. founded by Sir Chittampalam. A. Gardiner nearly 90 years ago, has now grown into a conglomerate owning the Cargills Food City chain with over 300 outlets, financial services and real estate with group assets topping Rs. 57.8 billion, has reported a strong performance in the year ended March 31, 2017, with company profit after tax better than doubling to Rs. 1.3 billion from the previous year’s Rs. 568.9 million.
The group profit at Rs. 2.7 billion, though less spectacular in growth terms was comfortably up 15% over the previous year’s Rs. 1.6 billion, against the 128.3% bottom line growth at company level.
Expressing satisfaction at the performance of the group during the year, the company’s chairman, Mr. Louis Page, said in its annual report that they had focused on "steady continuous growth/improvement while sustaining the growth and profitability momentum of the past few years."
"Our overall performance confirms that the objectives for the year were largely met," he said.
The two largest business segments of the group are retail and FMCG (fast moving consumer goods) expanding since 1983 when its first supermarket was established into 300+ outlets countrywide. Given that modern trade penetration in the country is yet below 20%, Page said there were immense opportunities and they "looked forward to further prudent investment" in this sector in coming years.
"The FMCG sector covers dairy, meat, agribusiness and confectionery sub-sectors," Page noted. "These sub-sectors too showed continuous growth over the past few years."
"We believe that we have built and operate a base of food processing facilities capable of some of the best food products in the said categories. These facilities, together with the marketing capacity and our retail network could be used for further growth."
Although the original business of film importers, distributors, producers and cinema exhibitors that Sir. Chittampalam founded is today only a small part of the CT Holdings conglomerate, this business continues with the group having maximized the value of prime real estate on which the chain of Ceylon Theatres cinemas stood with the Majestic City mall developed on the 1.5 acre site of the old Majestic cinema and a high-end residential tower developed on the location of the former Empire cinema.
Page said that they will continue to establish Mini-Malls in key cities and suburbs in the Western Province, the first of which was opened in Gampaha last March. The group’s retail, restaurant and cinema brands will be the anchor tenants at these malls.
Profits during the year under review translated to an earning per share of Rs. 9.55 (group) up from Rs. 8.88 a year earlier and Rs. 7.09 (company) up from Rs. 3.11 the previous year. Net assets per share stood at Rs. 121.24. A dividend of Rs. 5.20 per share, up from Rs. 3.80 the previous year, was paid in the year under review.
CT Holdings has a stated capital of Rs. 3.19 billion with retained earnings of Rs. 11 billion in its books. Total assets ran at Rs. 57.9 billion and total liabilities at Rs. 35.66 billion.
Odeon Holdings (Ceylon) (Pvt) Ltd. controlled by Mr. Louis Page is the top shareholder of CT Holdings with 41.75% followed by Mr. Anthony Page (8.69%) and Mr. Ranjit Page (6.13%). The Sir. Chittampalam. A. Gardiner Trust owns 5.03% and Ms. MM Page 4.83%. Several other members of the Page family are among the top 20 shareholders. The EPF holds 3.82%.
The directors of the company are Messrs. Louis Page (Chairman), Ranjit Page (Deputy Chairman/MD) JBL de Silva, Priya Edirisinghe, Sunil Mendis, Mrs. Ceciliya Muttukumaru, Dr. A. Aravinda Page, Joseph Page, R. Selvaskandan, ADB Talwatte, Imtiaz Wahid and SC Niles (executive director). Mr. Anthony Page is Chairman Emeritus).www.island.lk
"Must rationalize or dispose of continuously losing businesses"
The Colombo Fort Land and Buildings PLC (CFLB), a troubled conglomerate into a variety of businesses including plantations, leisure and industries, has taken a heavy blow from the weather in the year ended March 31, 2017, posting a group loss of Rs. 1.08 billion, up 59% from a loss of Rs. 680 million a year earlier, but is paying its shareholders a first and final dividend of 15 cents a share, it has been stated in its annual report.
The group is into industrial and consumer products, leisure, plantations, property rentals, motor, services, investment and manufacturing.
Listed entities under the group banner include Marawila Resorts, Sigiriya Village Hotels, Beruwela Resorts, Lankem Developments, Lankem Ceylon, EB Creasy, Laxapana Batteries, CW Mackie and CM Holdings.
"The adverse climatic conditions that the group had to face during this financial year contributed significantly to the increased losses that have been incurred. The failure of both monsoons has meant that all the group’s subsidiaries that have a stake in agriculture have faced difficult trading conditions," CFLB Chairman A. Rajaratnam said in the annual report.
"The outlook for the year ahead remains weak. The dry climatic conditions are likely to continue, as are extreme weather conditions of flash floods and high temperatures."
The group’s profitability had also been impacted by rising interest rates with finance costs up to Rs. 2.11 billion from Rs. 1.59 billion a year earlier. But high tea prices had been the silver lining in a bleak picture with losses in the plantation sector reduced, he said.
"In order to tide over these difficult times, the group will undertake an aggressive strategy of cost reductions to ensure that we can return to profitability as soon as possible," Rajaratnam said. "Where businesses are continuously running at losses, steps will be taken to either rationalize their operations or to dispose of them."
KPMG, the group’s auditors have said that "events and conditions may cast significant doubt that the respective subsidiary companies (identified in the notes to the accounts) will be able to continue as a going concern. Our opinion is not modified in respect of this matter."
But CFLB’s directors have said that they, after making necessary inquiries and reviews of the company’s future prospects and risks, cash flows and borrowing facilities, "have reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future."
The financial statements have therefore been prepared on a going concern basis, they have said.
Segmentally, the group had lost mostly in plantations (Rs. 658.2 million against a loss of Rs. 810.6 million a year earlier) and posted negative figures in trading of industrial products ( lossof Rs. 671.1 million), leisure (loss of Rs. 23.4 million, down from the previous year’s profit of Rs. 82 million) and others (Rs. 254.5 million against a profit of Rs. 239 million the previous year.) Trading and consumer products posted a profit of Rs. 529 million, up from Rs. 344.2 million a year earlier.
CFLB has a stated capital of Rs. 327 million and total assets of Rs. 41.9 billion. Total liabilities ran at Rs. 31 billion.
The company’s share with a net asset value of Rs. 8.41, up from Rs. 8.02 a year earlier, traded between a high of Rs. 25.30 and Rs. 17.50 during the year closing at Rs. 18.10. This compared to a trading range of Rs. 20 to Rs. 15.50 closing at Rs. 19.50 the previous year.
The group’s top shareholder is Colombo Investment Trust PLC (13.95%) followed by Property and Investment Holdings (Private) Ltd. (13.78%), Colombo Fort Investments PLC (12.06%) and Capital Investment Ltd. (10.82%).
Many of the Top 20 shareholders are related parties.
The directors of the company are: Messrs. A. Rajaratnam (chairman), SDR Arudpragasam (deputy chairman), Anushman Rajaratnam (MD), AM de S. Jayaratne, R. Seevaratnam, Ms. AK Gunawardhana, CPR Perera, PMA Sirimane and S. Rajaratnam.
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Mr. Alagarajah Rajaratnam, the Chairman of the majority of listed companies of the Colombo Fort Land and Buildings Group has divested the chairmanship of two group companies, Lankem Ceylon PLC and EB Creasy and Co. PLC but would continue to serve on their boards as a director, the companies announced through a stock exchange filings last week.
Mr. SDR Arudpragasam, Managing Director of EB Creasy and Deputy Chairman of Lankem, will succeed him with effect from Oct. 1. He will retain his position of MD of EB Creasy.
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Mr. Ishara Nanayakkara has increased his holding of Browns Capital PLC by purchasing 563,980 shares of that company on Oct. 3 and 796,000 shares the previous day at prices between Rs. 3.50 and Rs. 3.60 a share, Browns Capital said in a stock exchange filing last week.
The purchases were made through Churchill Capital (Pvt.) Ltd., a company which Nanayakkara owns and is the sole director.
After these purchases his state in Browns Capital has increased to 10.19%.
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Gap between issue and market price higher than in ComBank and HNB rights issues
Sampath Bank has summoned an extraordinary general meeting on Oct. 20 to obtain shareholder approval for a one for six rights issue at a price of Rs. 245 per share to infuse approx. Rs. 7.6 billion zero cost equity funds into its books.
In a circular to shareholders, the bank said that it was intended to issue 31.03 million new voting shares under the rights issue which analysts noted has been priced well below the prevailing market price of Sampath shares which closed on Friday at Rs. 326.
"Sampath follows Commercial Bank and HNB in floating a rights issue to meet Basel III regulations," an analyst said. "The gap between the rights price and the then market price of the HNB share was the narrowest in the two issues which were fully subscribed barring the HNB non-voting shares where much of the slack was later taken up."
"Shareholders who applied for additionals over and above their entitlements were satisfied to a fair degree by Commercial Bank and less so by HNB," the analyst said. "Give the recent appreciation of the Sampath share, full subscription will not be a problem."
Sampath said that fractional shares will not be allotted. Such shares would be pooled together and allotted to shareholders applying for additionals "on a reasonable basis," the circular said.
Sampath made a profit of Rs. 5.7 billion in the first half of this year at company level and Rs. 5.87 billion at group level.
The circular to shareholders said the bank intended to utilize the total proceeds of the rights issue to expand its loan book over a period of three to six months of the allotment of the shares and the funds will be lent in the normal course of business.
"The rights issue will provide an opportunity for the existing shareholders to invest in ordinary voting shares of the company at a discount of Rs. 55.24 compared to the net asset value of Rs. 300.24 as at June 30,2017," it said.
"Consequently they will be entitled for future dividends and possible market value appreciation on the shares."
Given the current demand for credit in the country, the possibility of not being able to lend the proceeds of the rights issue is "very remote," it added. "Even in the worst case scenario, the funds could be invested in government securities which are readily available for investment."
In June, July and August the Sampath share traded at a high of Rs. 302 and a low of Rs. 266.20 closing in Aug. at Rs. 301.30. The share is liquid with over 7.6 million shares traded in the three months. Sampath closed at Rs. 326 on Friday.
Mr. Dammika Perera’s Vallibel One is the bank’s top shareholder with 14.95%. Mr. YSHI (Indra) Silva follows with 9.99% and the EPF is the third biggest with 9.97%.
Sampath paid a cash dividend of Rs. 4.75 per share and a scrip dividend worth Rs. 14 for the year ended March 31, 2017. Dividends during the previous two years were Rs. 6 cash and Rs. 7 scrip and Rs. 5 cash and Rs. 6 scrip.
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