Financial Times

LB Finance plans condominium projects
LB Finance has reported heavy losses in its real estate sector but plans to focus on condominium development projects under its new strategy of doing value added real estate development projects.

During the year under review the company did not give much emphasis to new real estate development projects but concentrated on selling existing stocks.
The future strategy of this business unit will be some what different from the conventional way that it has been operating.

LB Finance recorded post tax profits of Rs 48.4 million for the 15 months ended March 31, 2005. It reported earnings per share of Rs 3.59 for the same period compared with a mere 24 cents per share reported for the previous 12 months ended December 31, 2004.

The company’s recent annual report has the financial statements for a 15 month period from January 1, 2004 to March 31, 2005 due to the change in the balance sheet date made in order to facilitate the requirements of the Central Bank.

The company’s return on equity also rose to 26 percent compared with two percent in the previous year. Its real estate sector and term loans sectors suffered heavy losses during the year under review. However the performance of leasing and pawning sectors was very good.

During the period, the company’s total assets have grown to Rs. 3.4 billion from Rs. 2.5 billion, an annualized growth of nine percent, the main contributor being leasing and hire purchase.

Its deposit mobilization increase by 29 percent compared with the previous year. The company’s deposit base grew to Rs 2.6 billion from Rs 2 billion.
Pawn brokering continues to grow and during the period the company opened eight new pawning centres raising the number of such centres to 22.

LB Finance shares are currently traded between Rs. 48.50 and Rs. 50 per share on the Colombo Stock Exchange. The company’s market capitalization as at end of July 2005 was Rs. 668 million at the price of Rs. 49.50 per share.
Dhammika Perera holds 73 percent of LB Finance or 9.9 million shares. The collapsed Pramuka Savings and Development Bank is the second largest share holder in the company, with an 11.2 percent stake in the company.

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