Capital gains from the sale of hotel shares, turnaround in subsidiaries, along with reduction in finance costs saw Hayleys posting its highest profit in history, analysts said.
“The sale of Lighthouse Hotel and other hotels, improvement of performance in subsidiaries- Dipped Products and Haycarb and the drop in finance costs saw Hayleys post a profit of 1.775 billion for the year ended 31 March 2010 against Rs 311 million posted a year earlier seeing a 470% growth,” Deshan Pushparajah, Assistant Manager Corporate Finance, Capital Alliance said. He said that the acquisition of 60% in Hayleys MGT (HMGT) and good performance of HMGT coming into the Hayleys’ income statement also helped the company better its performance.
In announcing the results, Hayleys PLC Chairman Mohan Pandithage said: “The year also saw the single largest investment in the 132 year history of the company - the purchase of a controlling stake in Ceylon Continental Hotel, resulting in total investment in subsidiaries doubling in the year reviewed, and initiatives to rationalise the Group’s businesses and strategies yielding spectacular results.”
Into the next quarter, analyst Mr Pushparajah said that the capital gains seen during last year will not be recurring, but the subsidiaries are slated to do well and improve profits. “Their acquisition in Continental will not bring in too much profit for at least another two quarters (a refurbishment might also be in the offing),” he said, adding that the full benefit of this acquisition will be witnessed next year.
He also said that subsidiary, Hunas Falls Hotel will bring in improved profits although not too significant to impact Hayleys’ bottomline significantly.
He also noted that the long term growth of the company will be driven by its higher investment in the leisure sector, but the company’s heavy exposure to commodity prices is a continuous risk factor. |
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