Lanka Tiles
group turnover up despite uncertainties
In an economy that benefited from increased
foreign inflows, greater construction and industrial
growth, Lanka Tiles Ltd (LTL), part of the Lanka Tiles
Group, was able to register a net revenue of Rs.1, 567
million in 2005/06, up 20.8% from 2004/05.
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Tiles ready to be
shipped out |
Gross profit also rose by 33.9% to
Rs.532 million. The profit attributable to shareholders
grew by 25.2% to Rs.205 million. LTL's share performed
well during the year under review with 1.42 million
shares traded at the CSE at lowest and highest prices
of Rs.53 and Rs.75 respectively.
While local sales increased by 25.9%
during the year, export sales declined by 12.2% to Rs.149.7
million. This was mainly due to the drop in exports
to Australia, which nevertheless continued its dominance
as the largest buyer of LTL's products, ahead of Japan.
The company's annual report states
it invested Rs.155 million during the year in a state
of the art press machine and a glazing line with the
aim of augmenting existing old machines with low productivity.
The company further invested Rs.300 million on re-commissioning
of an idling kiln, signifying a 30% capacity increase
from a year ago. The impact of this production increase
will be felt partially during the year 2006/2007.
Exports had a good year both at Lanka
Walltile Ltd (LWL) and its wholly owned subsidiary,
Lanka Walltile Meepe (Pvt) Ltd (LWMPL), part of the
Lanka Tiles Group, with sales increasing from Rs.452
million to Rs.481 million for the year under review
at LWL and from Rs.120 million to Rs.141 million for
the same period at LWMPL. Volumes however increased
marginally overall to 899,972 square meters from 853,645
square meters. According to the annual report, the demand
for both wall and floor tiles continue to grow in tandem
with the growth in the construction industry.
The Local Sales Network continued
to increase its performance from last year, both in
volume and value at both LWL and LWMPL. Consolidated
sales value registered a 27.08% increase from Rs.649.8
million to Rs.825.8 million while volume sales registered
a 11.55% increase.
In the aftermath of the tsunami, the
growing demand for houses and the accelerating expansion
of the urban sector, with continuing population growth
saw the housing market expanding rapidly. LWL and LWMPL
enjoyed one of the best years, performance wise, particularly
in the local market as the products manufactured and
marketed catered essentially to the construction industries
requirement.
The consolidation of markets throughout
the country through regular marketing representatives
visits, backed up by executive visits and monthly sales
conferences ensured continued supply and service. The
LWL Brand was recognized for its strong market presence
in March this year when the company was accredited with
"Superbrand" status by Superbrand Lanka (Pvt)
Limited, a UK based independent authority on branding.
The Lanka Tiles Group turnover increased
from Rs.4,210 million to Rs.4,907 million, an increase
representing 17% which is indeed satisfactory considering
the overall business climate in the country. Group profit
after tax, at Rs.282 million represented a 39% increase
over the previous year. All of the Group's sectoral
activities recorded results very much in keeping with
the company's expectations.
Chairman Anthony A Page says the Group
is presently involved in four broad sectors, those being
ceramics, plantations, packaging and manufacture of
wooden flooring. The ceramic sector's main focus is
on both wall and floor tiles and performed creditably
during the year, mainly due to the surge in demand locally
resulting from the growth in construction activity.
The group has already posed a 26%
increase in profit in the first quarter of 2006/2007
compared with the corresponding period in 2005/2006
and is busy refocusing its business strategies to overcome
certain challenges it is currently facing.
Page says the group performed satisfactorily
during the year ended 31st March 2006, posting an after
tax net profit of Rs.205 million. However, resumption
of hostilities in the North and East of the country
and its fallout is being felt in the rest of the country.
"Persistent rise in energy prices, surge in prices
of construction materials, disturbances in the North
and East and its effect on fisheries, agriculture and
tourism sectors will all contribute in some measure
to slow down the momentum that the economy gained during
the past few years," says Page, adding that these
factors will naturally challenge the group's ambitious
future growth plans.
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