Fast forwards plans for Sri Lanka
The Sri Lanka-based diversified conglomerate Aitken Spence PLC recorded a net profit attributable to shareholders of Rs. 2.08 billion for 2009/10, showing an increase of 1.8% from last year. Revenue for the year stood at Rs. 24.4 billion. The operating profit for the year was Rs. 4.0 billion while the net profit after tax was Rs. 3.0 billion. Company’s results released to the Colombo Stock Exchange on Friday revealed an impressive Earnings per Share of Rs. 76.73, up from Rs. 75.37 during the previous year. The Company announced an outstanding dividend per share of Rs. 10, which increased from Rs. 9.50 last year.
The bluechip’s share price at the year end stood at Rs. 1,373.75 which represents a remarkable growth of 336.1% from a year ago.
In his review, Chairman of Aitken Spence PLC, Mr. D H S Jayawardena said:
“Despite the economic downturn worldwide and a year full of challenges faced by the country, I am proud of your Company’s performance which recorded the highest ever profit attributable to shareholders amounting to Rs. 2,077 million.
2010/11 will see Aitken Spence embark on a new phase in its expansion in Sri Lanka. As I stated last year, the Group remains committed to play its part in the nation building agenda of the government. With this in mind, our expansion plans will encompass the newly liberated areas of North and East”.
The Group’s maritime transport, integrated logistics, printing and tourism segments were the main drivers of growth this year.
Aitken Spence Hotel Holdings PLC., the investing company of Aitken Spence Hotels, has approached its shareholders to raise Rs. 2.5 billion through a right issue which was successfully concluded recently. The funds will be used for the high priority expansion projects in Sri Lanka, including those in the North and East and a smaller portion of the funds will be utilised for the development of a high-end resort in Kerala, South India, in a joint venture with an Indian partner.
“We intend developing the 100 acre beachfront property at Nilaveli as a priority project. We are in the process of evaluating a number of options before deciding on the final development plan at Nilaveli which would be aimed at harnessing the maximum value of this prime property. Also in the pipeline is a hotel in Jaffna where there is presently a dearth of high quality accommodation for both international and domestic travelers.
The Group continues to explore new opportunities for management of hotels in other regions, including those in which we already have a presence”, said Deputy Chairman and Managing Director, Mr. J M S Brito.
Although the Sri Lankan resorts made losses during the first half of the year, the second half showed a much improved performance. With the leap in prospects in Sri Lanka, the Company has fast tracked its expansion plans in the tourism sector.
During the year under review, Aitken Spence refurbished and rebranded its unique theme hotel in Kandapola as Heritance Tea Factory while the high-end Adaaran Prestige Vadoo commenced operations in the Maldives. The Group acquired Ramada Resort, formerly known as Golden Sun Resort, in Kalutara which was earlier only a managed property. The Company intends to upgrade the resort with refurbishments planned for the near future.
Key projects rolled out during the year include the conversion of Neptune Hotel, the Group’s first ever resort property, into a sixty four roomed specialised ayurveda and wellness resort, due to open in December 2010.
The destination management segment made a strong performance during the year as tour operators increasing their volumes due to peaceful conditions.
Maldives fared marginally better than last year, which is still an impressive performance, even though global conditions continued to impact the market. The Company notes that by the end of the year the islands and in particular its Adaaran Resorts were enjoying heavy demand and high occupancy rates, although the average room rates declined.
The Group’s airline GSA business comprising of the General Sales Agencies for Singapore Airlines and Kingfisher Airlines reported losses during the year due to reduced flights and reduced airfares combined with the oppressive conditions of the industry worldwide.
The scope of the Company’s maritime operations in the African continent widened during the year with the award of a ship planning contract involving several South African ports, in addition to the existing port efficiency enhancement operations.
The Group’s power segment performed well given the constraints in the industry. The Company notes that growth potential in Sri Lanka seems limited in the immediate future, which has accelerated its efforts to venture overseas and utilise its expertise in the region. In addition, the Group continues to pursue green and alternative energy projects. Aitken Spence has already commenced a hydropower project in Matale.
The Group’s integrated logistics segment performed well during the year, during which it also made several investments in expanding its container freight station and warehousing facilities.
Shortly after the year end, Aitken Spence divested its stake in Hayleys Plantation Services Ltd, in keeping with our policy of only owning companies in which we have control of management.