Strong 2ndH 2020/21 for JAT; plans to raise public capital
View(s):JAT Holdings, a market leader for wood coatings and a diversified conglomerate, ended FY 2020/21 with a strong and solid performance, against the backdrop of challenging market and economic conditions.
In addition to JAT Holdings’ overall growth trajectory, guided by its corporate strategy, the company’s primary near-term objectives include an Initial Public Offering (IPO) and listing on the Colombo Stock Exchange, in a bid to raise capital. These funds will be used to drive development activities such as the establishment of a new state-of-the-art R&D facility and the commissioning of a new manufacturing plant in Bangladesh, for which negotiations have been completed and initial implementation is underway. Discussions are also ongoing to commission a plant in Africa. Together, these new facilities will further consolidate the company’s position in these regional markets, while also contributing towards revenue and margin growth.
Despite recording a marginal nett loss in the first half, owing to the pandemic, the group mounted a successful recovery in the second half, posting a healthy Rs.621 million profit after tax, completely reconciling losses incurred earlier in the year, driving gross profit margins from 27.6 percent to 30.7 percent YoY, while maintaining nett the profit margin at 11.2 percent, the company said in a statement this week.
Nishal Ferdinando, CEO – JAT Holdings said, “Being the leader in wood coatings, possessing a strong product portfolio in paints, brushes, ergonomic office furniture, decking, ceilings, bespoke kitchens, etc in addition to having significant revenue streams from Bangladesh and other South Asian countries through multiple sales channels, enabled JAT to successfully mitigate the effects of the pandemic and remain resilient through 2020/21. We pivoted to a work from home model for our corporate staff, while ensuring the safest possible work environments for our manufacturing staff and resolved to stand up and fight for a better future. Our efforts have paid off, and the results we have delivered speak for themselves. As part of our future growth trajectory, we are looking to raise capital from the public, to further our growth aspirations and expand our sphere of influence. We are proud to say that, with the resilient performance we have delivered amidst the most challenging environment, any investor can confidently place their trust in us.”
FY 2020/21 saw the company enjoying its highest ever recorded YoY revenue growth, 29 percent, in the Sri Lankan market for wood coatings, paints and brushes. The company also enjoyed positive cash flows for over seven months of the year at a stretch, despite challenges, ending the year nett positive with Rs.490 million as at 31st March 2021. The strength of the Company’s cash position is further attested to by a nett debt (cash)/equity ratio of negative 0.03.