• To pursue strategic investment opportunities in the core sectors of the group

Hemas Holdings Plc (HHL) on Friday announced its first ever Rights Issue with the aim of raising Rs. 4.12 billion to finance new strategic investments. The HHL Board resolved to issue 1 for 9 rights issue at Rs. 72 each. HHL at present has 515.29 million shares in issue (stated capital is Rs. 1.6 billion) and the planned Rights will see the creation of 57.254 million shares. “It is intended that the proceeds of the issue be used to pursue strategic investment opportunities in the core sectors of the group,” HHL said in a filing to the Colombo Stock Exchange. The company will convene an EGM to get shareholder approval for the Rights Issue. The announcement was made after the market’s closure. On Friday Hemas was down 20 cents to close at Rs. 85. In the third quarter, HHL’s highest share price was Rs. 102.17 which was also the closing price. At Group level net asset per share of HHL is Rs. 28.69 as at 31 December 2014, up from Rs. 25.39 from a year earlier and Rs. 27.75 as at 31 March 2014. At the company level the Net Asset Per Share was Rs. 12.18 down from Rs. 13.11 a year ago and Rs. 13.28 as at end FY2014. Public float of HHL is 28.25% while the company has 4,723 shareholders. Among major shareholders are the Hussein family controlled A.Z. Holdings Ltd. (17.6%), Saraz Investments (16.7%), Bluberry Investments (16.65%) and Amagroup Ltd., (16.65%). Franlin Templeton holds 7.2%. HHL’s last fundraiser was Rs. 1 billion in April 2014 via a listed five-year fixed rate listed debenture issue with an interest rate of 11% payable semi-annually. HHL last week announced it increased consolidated operating profit from continuing operations by 21% to Rs. 1.5 billion in the first nine months of FY 2015. The group recorded revenue of Rs. 23.6 billion for the period, a growth of 19.5%. “Key drivers of this growth were the Consumer, Healthcare and Leisure sectors,” Hemas CEO Steven Enderby said. The consolidated operating profit for the period was Rs. 2.2 billion, recording a growth of 19.0%. Underlying earnings growth of the core businesses adjusted for one-off items stood at a healthy 46 %. The key one-off items were the Rs. 157 million losses on the disposal of the group’s stake in Hemas Power Plc and the capital gains recognised in the previous year of Rs. 364 million from the land transfer of Peace Haven to PH Resorts, a joint venture company. However, consolidated earnings posted a decline of 21.5% to record Rs. 1.2 billion. “The focus of the group is developing our core strengths in the Wellness, Leisure and Mobility industries. As we head into the final quarter of the financial year, we are confident that our portfolio rationalisation and renewed focus on our core areas will yield us strong growth across our businesses as we look to maintain and build on our industry-leading positions,” Enderby said in a note accompanying interim results.