James Finlay’s first half profits soar

James Finlay & Co said last week that its new tea bagging machines has well placed the company to cater to new emerging trend of products.

In July, it installed three brand new IMA C27 machines at an investment of Rs.250 million, the first company to do so in Asia.

“These machines produce staple-less teabags, which are entirely in consumption habits towards this type of environment friendly teabags and, as the pioneer, we are well placed to cater to this emerging trend,” it said in a statement to announce its half-yearly 2006 results.

Provisional and un-audited results of the group for the six months ended June 30 show a sharp 196% increase in operating profit, when compared to the corresponding period of last year.

“While profits from ongoing business activities increased by 11% compared to the first six months of last year, there was a one-off profit made on the sale of shares in Eagle Insurance Company Ltd, amounting to Rs 256.9 million, which resulted in the substantial increase in profitability.

The net profit after tax increased by 187% to Rs. 413.1 million. A special dividend amounting to Rs.255.5 million (Rs.7.30 per share) was declared and paid on April 21,” the statement said.

The beverage packing division exported 4.6 million kg of tea as against 4.0 million kg exported in the first six months of last year.

Service related divisions showed encouraging results with higher turnover and profit during the first half of the year compared with the corresponding period of last year.

The airline, insurance and environmental services divisions in particular have demonstrated robust growth, while operating in a challenging business environment, the company said. It said to meet increasing demand and to meet the evident need for international standards of cold chain compliance, the company is constructing a large extension to the existing facility that will double present capacity.

This project is expected to be completed in the fourth quarter of 2006, will create more sellable space and deliver economies of scale through the greater operational efficiencies incorporated in the design.

“With a strong focus on achieving revenue growth, coupled with a drive towards greater productivity and total quality management, there are grounds for cautious optimism that the company will deliver satisfactory results during the remaining period of the current year.

However unrest, both in Sri Lanka and in some of our key export markets, is a cause of concern and we remain sensitive to any signs that demand for our products and services might be affected in all of the areas in which we operate,” the company said.