Textured Jersey hits Rs. 1.3 b mark; a record for annual profits
Thursday, 30 April 2015 01:26
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Textured Jersey Lanka Plc (TJL) recorded its highest ever annual net profit of Rs.1.3 billion for the year ended 31 March 2015, an increase of 16% year-on-year.
This result was achieved on the back of a Rs. 512 million net profit for the quarter ended 31 March 2015, representing an impressive 46% year-on-year increase. According to Textured Jersey Chairman Bill Lam, the strong quarterly performance enabled the company to conclude the year with a record profit despite the slowdown in sales experienced during the early part of the year, attributed to unusual and extreme weather conditions in the United States.
TJL reported Rs. 3.8 billion in sales for 4Q FY2014/15, up 16% year-on-year. As per the statement released, this was mainly due to demand from its main customers being back on track. Additionally, Lam explained that improved demand conditions, coupled with recently added capacity, enabled TJL to optimise capacity utilisation and product mix to achieve gross profit margins of 15% for 4Q FY 2014/15 compared to 12% during the same quarter of last year. This in turn allowed the company to increase its gross profit by 45% to Rs. 583 million for 4Q FY2014/15 and drive its annual gross profit to Rs. 1.6 billion, up 11% compared to the year before.
The statement further noted that the strong performance at the gross profit level allowed TJL to post an operating profit of approximately Rs. 476 million for 4Q FY 2014/15, recording a 52% year-on-year growth at the operating profit level. TJL’s annual operating profit for the year ended 31 March 2015 came in at Rs. 1.2 billion, 14% higher year-on-year.
Talking about the balance sheet, Lam mentioned that TJL continued to maintain its near debt-free balance sheet as at 31 March 2015, with a net cash position of Rs.1.9 billion. Additionally, the Chairman explained that the lower interest rates, combined with a marginally lower cash position compared to a year before led to net finance income dropping to Rs.14 million for 4Q FY2014/15. The net finance income for the year ended 31 March 2015 came in at Rs.58 million, down 36% compared to the year before.
In his statement, Lam went on to explain that despite the reduction in finance income, the quarter concluded with a net profit of Rs.512 million growing 46% year-on-year. The combined effect of added capacity and strong demand recovery in the latter part of the financial year, coupled with solid cost and productivity management, enabled TJL to report a record an annual net profit of Rs.1.3 billion for FY2014/15 despite challenges.
The statement also mentioned that TJL engaged with Ernst & Young during the quarter to carry out an independent valuation of Ocean India Ltd. and Quenby Lanka Prints Ltd. as part of the initial discussions to further its acquisition plans.
Commenting on the coming year, Lam stated that the recently enhanced capacity and strategic investments coming into fruition will place TJL on a solid growth platform. The Chairman concluded by stating that as regional expansion plans move forward to secure TJL’s long-term growth trajectory, the prospects of GSP+ being reinstated in the future would further augment TJL’s current momentum.
