Odel posts strong 1Q with gains from investments

Friday, 9 August 2013 00:00 - - {{hitsCtrl.values.hits}}

Sri Lanka’s fashion and lifestyle retail icon Odel has recorded revenue of Rs. 965 million for the three months ending 30 June 2013, down a marginal 4% from the corresponding period of last year.

This was achieved despite the 12% Value Added Tax (VAT) imposed on the company’s top line in the review period, the impact of which could not be fully countered by sales growth in the quarter, the company said. The impact of the imposition of VAT on large retailers was however mitigated by income from the investment of funds from Odel’s December 2012 Rights Issue, which raised Rs. 2.5 billion. These funds are invested pending the finalisation of planned expansion projects, the company said. According to interim statements filed with the Colombo Stock Exchange, Odel’s profit before tax for the three months grew by Rs. 52.3 million over the corresponding period of last year to Rs. 76.7 million. Gross margin improved by nearly 4.5% and the company was able to trim finance expenses by a significant 38% due to lower interest rates and reduced borrowings through the utilisation of part of the proceeds of its rights issue. Due to higher employee costs and utility costs, administration expenses increased by 16.6% in the quarter reviewed. Odel PLC posted sales of Rs. 4.5 billion and profit before tax of Rs. 231.6 million for the 12 months ending 31 March 2013.