Printcare to sell 45% in JV to US firm for Rs. 1.2 b

Monday, 20 December 2021 04:23 - - {{hitsCtrl.values.hits}}

Printcare PLC is to sell 45% stake in r-pac Printcare Lanka Ltd. to its joint venture partner r-pac International Holdings Co. LLC for Rs. 1.2 billion, or $ 6 million.

Printcare said the offer made by r-pac International represents good value for the shareholders. Printcare has got the valuation of the investments by an independent valuer to ascertain the fair value. “The transaction value is higher than the valuation,” it added.

This transaction is subject to shareholders’ approval at an EGM, which is to be convened shortly.

The Printcare Group's carrying amount of the associate company investment was stated at Rs. 131 million in FY21 (inclusive of Rs. 63 million in profit), up from Rs. 68.7 million in FY20.

On Friday post-announcement, Printcare share price gained by 19%, or Rs. 8, to close at Rs. 49.40, with 618,522 shares changing hands via 465 trades for Rs. 30 million.

Based in Ragama, r-Pac Printcare specialises in manufacture of hang tags, fabric care labels, self-adhesives labels, heat transfer labels and hardline packaging.

In FY21, Printcare group turnover was Rs. 6 billion, up from Rs. 5 billion. Profit before tax was Rs. 519 million as against a loss of Rs. 29 million in FY20.

In the first half of FY22 Group revenue was Rs. 3.3 billion, up from Rs. 2.7 billion a year ago. Pre-tax profit was marginally down to Rs. 251.7 million from Rs. 287 million. Share of associate profit was Rs. 47 million, up from Rs. 40.5 million. In the second quarter, revenue rose to Rs. 1.7 billion from Rs. 1.5 billion, pre-tax profit dipped by Rs. 80 million to Rs. 112 million with increases in distribution, administrative expenses and finance cost.

MJF Holdings owns 26.87% stake in Printcare whilst K.R. Ravindran owns 21% stake.