Asia Asset Finance projects 20% profit growth going forward

As Asia Asset Finance Ltd (AAFL) opens its Rs. 425 million Initial Public Offering (IPO) on 28 November the company forecasts that it will grow Net Profits by 20 per cent going forward.

The company plans to expand their branch network from 10 to 19 before the end of year 2012, mainly in the North and East region.

AAFL will be offering 120 million shares to raise Rs. 425.4 million and the IPO will be priced at Rs. 2.50 per share with the option to sell a further 50 million shares. “The funds will be used to expand the core operations of the company,” AAFL Director/CEO, Rajiv Gunawardena told the Daily FT newspaper.

AAFL has no outstanding bank loans and company sources said unutilised credit lines are readily available to the company. Its lending portfolio was reaching Rs. 2 billion at the end of October.

Its customer base presently exceeds 5000 customers with 300 new customers joining monthly.

AAFL intends to position itself in the market as an unconventional finance company and has differentiated by providing innovative financial solutions such as customised loan schemes, easy repayment schedules etc. The ‘360 degrees concept’ is another innovative business concept from AAFL which focuses on building the customer loyalty by not only providing credit facilities but also arranging means of generating higher revenue for customers for repayment of their loans, the company stated.

Working under a new management team headed by Gunawardena, the performance of AAFL has improved by offering innovative financial solutions and through product diversification.

The company managed to turnaround from losses in to profits registering approximately 195 per cent growth in net profits to Rs. 80 million in the financial year 2011. AAAFL recorded accumulated loss of Rs. 434 million at 31 March 2010. However the Company reported a profit of Rs. 45 million for the six months ended 30 September 2010.

A fully owned subsidiary of the Asia Capital group – AAFL is a licensed deposit taking institution registered with the Central Bank of Sri Lanka.

Its main focus lies in public deposits, finance leasing services, hire purchase and asset backed financing.