First off the block Royal Ceramics’ 9-month net profit tops Rs. 1 billion

Tuesday, 11 January 2011 00:30 - - {{hitsCtrl.values.hits}}

* Surpasses 2009/10 full year performance within first nine months; Group enjoys best ever third quarter whilst end 3Q profits up 59% and turnover grows by 36%

Royal Ceramics Plc (RCL) yesterday announced stellar performance for nine months with net profit topping the Rs. 1 billion mark aided by healthy top line growth both of which had overtaken the 2009/10 full year results already.

Being the first listed entity to release interim results for the quarter ended 30 December, 2010, RCL had posted a net profit attributable to equity holders of Rs. 1.019 billion up by 59% in the first nine months of 2009/10 financial year. Group turnover grew by a robust 36% to Rs. 4.7 billion. Gross profit was up by 32% to Rs. 1.94 billion and profit before tax was Rs. 1.089 billion, up by 65%.

Within nine months RCL had overtaken 2009/10’s full year results as in that year turnover was Rs. 4.4 billion, profit before tax was Rs. 1.0 billion and net profit attributable to equity holders was Rs. 964.3 million. Incidentally 2009/10 was the best year for RCL’s history whilst as 9 months results confirm 2010/11 is already on course to be better.

Analysts have been maintaining that being a single brand (Rocell) company, RCL’s performance is outstanding and it dwarfs some of the more established and diversified entities which have to be content with much lower profits.

The market is likely to toast RCL’s results today as interim accounts were released only after the market was closed. Nevertheless as part of overall momentum, RCL yesterday gained by Rs. 6.60 to close at Rs. 315.40 whilst it peaked to a high of Rs. 335, one rupee below its all time high.

The Group has had an impressive third quarter with turnover amounting to Rs. 1.87 billion, up from Rs. 1.5 billion a year earlier and net profit of Rs. 412.9 million, higher in comparison to Rs. 366.3 million in the third quarter of 2009/10. Nine months earnings per share jumped to Rs. 18.40 from Rs. 11.74.

RCL Managing Director Nimal Perera told the Daily FT in the month of December alone turnover was a record Rs. 770 million, a figure which used to be the 18 months turnover of the Company five years ago. Within the December sales figure was Rs. 21 million of export turnover whilst its new line bathware sales were Rs. 87 million.

Pre-tax profit for the nine months included Rs. 192.5 million by way of other operating income inclusive of capital gains amounting to Rs. 185.7 million. RCL has stakes in Hayleys, LB Finance and Fortress.

RCL’s group assets topped the Rs. 7.5 billion mark from Rs. 6.4 billion as at 31 March, 2010 whilst the Company saw its figure surpassing the Rs. 5 billion mark from Rs. 4 billion as at end 2009/10 financial year. At group level net asset per share was Rs. 83.56 and that of the Company was Rs. 46.80, in comparison to Rs. 70.16 and Rs. 42.08 respectively as at 31 March, 2010.

Rocell is now part of young business leader Dhammika Perera’s recently floated first holding company Vallibel One. In October he sold the controlling 51% stake under his personal name to Vallibel One. This move was part of institutionalising Dhammika’s personal holdings in listed companies and similar transfers were done with regard to stakes in LB Finance, and Sampath Bank.