Financial Times

Intangibles at LMSL
 

In today’s context, what drives the earnings of a business are the intangible assets more than the tangible assets. In the LMSL issue, John Keells Holdings (JKH) has returned the tangible assets (land, buildings, storage facilities etc) and have retained the intangible assets.

The most important intangible assets in this case are the customer databases, customer relationships, supplier data bases, supplier relationships, experienced and trained people and the technical know-how of running the business. JKH continuing to carry on the business is tantamount to robbing these intangible assets. What’s more, the tangible assets in the hands of the new owner would be of little use and value without the full ownership of the intangible assets.

This is like selling the land, buildings and bottling plants of Ceylon Cold Stores without the Elephant Brand. Who would make greater profits? The one who has the Elephant Brand or the other?

Business analyst
Colombo

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