Richard Pieris records PAT growth of 106% in Q1 2014/2015
Saturday, 16 August 2014 00:11
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The Richard Pieris Group ended its 1st quarter on a strong note, reporting a growth of 106% in its net profit when compared to the corresponding period of the previous year.
Chairman Dr. Sena Yaddehige
The three months ended 30 June 2014 evidenced a steady performance in all its major sectors with a reported quarterly turnover of Rs.8.8bn, which is a 7% growth over and above last year. The reported profits represent business profits, and do not include any gains of a capital nature.
The Retail Sector of the Group comprises of Arpico Super Centres and the network of Arpico outlets scattered island wide. The sector had a dynamic first quarter as usual and the main focal point was the opening of its 16th large format retail outlet in the city of Panadura. This store is in excess of 20,000 square feet in floor area and offers a wide range of conveniences to the shoppers of Panadura.
The Plastics and Distribution Sector gained momentum during the period ended 30 June 2014 after a very quiet 2013/14. Several process improvements were made in the furniture manufacturing business where the product quality and portfolio have been further enhanced.
Several marketing activities were carried out to boost mattress sales which have yielded better margins and sales growth. During the period under review there was a significant increase in the sales volumes of water tanks and the sector also introduced hybrid water tanks into the market. The sales of rigifoam were adversely affected due to adverse weather conditions.
The Plantation Sector of the Group experienced a successful 1st quarter with a significant increase in operating profits.
The Richard Pieris Group possesses three of the largest plantation companies in the country with diverse crops which includes high grown, mid grown and low grown tea, rubber, oil palm, coconut, cinnamon, cardamom, rambutan and other crops contributing to more than 20% of Group turnover.
High prices recorded and a significant increase in production of tea was a key contributing factor towards the sector reporting the said increase in operating profits over last year. The sector was hampered by poor rubber prices, however an improvement was seen in the prices and production of oil palm.
During the period under review the Tyre Sector continued to benefit from favourable raw material prices and savings in energy sources which were introduced last year which resulted in an overall increase in terms of profitability.
Products introduced towards the latter part of the last financial year was gaining market acceptance and during the period under review Richard Pieris Tyre Company introduced a new tyre ‘Hida’ which was targeted towards the mini trucks.
The Rubber Manufacturing Sector continued to prosper during the 1st quarter of 2014/15 in the back drop of a very successful 2013/14. The latex foam business continued to thrive and managed to reduce its debt levels during the quarter through improvements in working capital management.
There was also a remarkable improvement in Richard Pieris Exports where profitability has doubled when compared to last year. This is mainly due to increase in volumes and quality improvements leading to lower levels of product rejects.
With a strong Q1 performance the Group is well geared to face up to the challenges for the rest of the year and a spokesman for the company said that the outlook for the rest of the financial year is promising.
