Richard Pieris records 6 months revenue of Rs. 16.7 b
Thursday, 14 November 2013 01:03
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The Richard Pieris Group ended its first half year’s performance with a group operating profit of Rs. 1.1 billion which reported a decline when compared to the corresponding period of the previous year.
The impact of the wage increase in its plantation sector and the negative effects of the current economic down turn which has had its force on consumer spend.
The reported revenue for the group for the first half year of 2013/14 was Rs. 16.7 billion which is marginally lower than the reported figures of the previous year.
Sectoral performance: Retail sector
The retail sector of the group continued its marketing activities in challenging economic conditions and the popular ‘Privilege family beach holiday’ campaign was successfully conducted for the fourth consecutive year.
Despite the downturn in business the expansion plans are well underway in selected strategic locations. The negative sentiments on consumer confidence continued to be evident throughout the quarter under review. Therefore, the company continued to focus on managing overheads and inventory.
Plastics and distribution sector
The sector faced a range of challenges during the quarter ended 30 September 2013, which included unfavourable market conditions, bad weather and low consumer purchasing power due to adverse economic conditions.
The sector’s products do not constitute a purchase priority in daily life and this proved to be a drawback in the phase of the sluggish economy and the reduced spending power of consumers.
However, each of the sector’s SBUs continued to search for market opportunities, introduced effective competitive pricing mechanisms, focused on reducing overheads to enhance profitability levels, and focused on minimum work-in-capital investments to optimise costs.
Plantation sector
The impact of the wage increase in the last quarter in the plantation sector employees had its impact on the reported results of the period under review as well. The drop in rubber prices, poor crops and drop in export volumes affected the sector’s performance in a negative manner. On a more positive note there was a significant increase in both the crop as well as the prices obtained for oil palm.
Tyre sector
During the period under review the tyre sector, of the group reported an increase in their reported profits when compared with the results of previous year. Richard Pieris Tyre Company continued to introduce new products to the market and during the period under review the brand ‘ARL’ was introduced where it focuses on the agricultural sector.
Rubber manufacturing sector
The sector continued to prosper during the first half of financial year 2013/14 with all companies performing well to achieve their respective budgets. The latex foam business continued to thrive with a dynamic management team which enabled to maintain budgeted sales levels despite the slowdown in European markets.
Cost saving initiatives continued and the effective management of the biomass boiler helped in the saving of energy to the latex foam business.
The shoe soling business of the sector continued to improve its performance and with the exploration of new markets and the introduction of new products the business is on its way of making a turnaround.
The group continues to focus on its core sectors despite external challenges with planned expansions in its retail operations. A spokesman for the company stated that the group will bounce back with a strong performance during the second half of the year.
