Teejay Limited - Investor Relations
News
30 October 2015
Teejay (TJL) reported a net profit of Rs. 206mn for the quarter ended 30th June 2015 (1Q FY 2015/16), a commendable overall profit growth of 26% year on year. According to Mr. Bill Lam, Chairman of TJL, the company achieved two key strategic milestones during the year; announcing the acquisitions of Ocean India (Private) Limited (OCI) and Quenby Lanka Prints (Private) Limited (QLP). During 1Q FY2015/16, pursuant to the conclusion of all legal and regulatory formalities, TJL was able to consolidate QLP as a wholly owned subsidiary of TJL with effect from 1st June 2015. Accordingly for 1Q FY 2015/16 TJL recorded consolidated revenue of Rs. 2.8bn with a net profit of Rs. 206mn creating a platform for synergies and further growth in value added products.

Teejay (TJL) standalone performance has been reinforced with the consolidation of both QBL and OCI, resulting in the Group’s consolidated results reporting an impressive revenue growth of 16% and bottom-line growth of 66%. The Group’s gross margin growth of 84% was driven by the envisaged sourcing synergies and cost management strategies at group level.

Bill Lam, Chairman of TJL, in his review says that the company's strong bottom-line growth which has delivered a Net Profit of Rs. 379 Million on a standalone basis and Rs. 468 Million on a consolidated basis; is despite incremental administrative overheads TJL had to incur in setting up robust systems, processes and infrastructure for long-term growth plans. The final result being an EPS improvement from 0.43 in 2Q FY 2014/15 to 0.71 in 2Q FY 2015/16 for TJL consolidated, which reinforces the value of these acquisitions to all Shareholders.

“TJL’s commitment to a strong balance sheet has been sustained as of 30 September 2015 in the midst of its acquisition cash outflow. TJL has optimized its working capital and remained unleveraged with a net cash surplus of Rs. 1.6bn,” said the Chairman.

The Group’s results were achieved on the back of a topline of Rs. 4 billion representing a 16 % year on year increase, while the gross profit came in at Rs. 622 million, up by 84% compared to the same period last year. The increase in gross profit could be directly attributable to the improved margins achieved during the quarter under review, through envisaged sourcing synergies coming in to play and cost management strategies. The standalone TJL gross profit margin for 2Q FY2015/16 was at 14% compared to 10% during the same period last year. The bottom-line growth is driven primarily from economies of scale, tight cost management and improved operating efficiencies, which is reflected in the gross profit growth of 41%.

TJL has widened its footprint by exploring different customer bases, reducing over dependency by limiting themselves to a few customers, and similarly come up with varied product ranges. Sriyan de Silva Wijeyeratne, the CEO of Teejay commented “The company is well on its way to establishing a well-balanced retailer and vendor base and has seen strong customer demand for its cutting edge Innovations, both in the Fabric and Print space. Quick turn around coupled with strong oversight and management within the acquired subsidiaries have also helped the bottom line”.

Commenting on the consolidation of the Group, Bill Lam highlighted that with the acquisitions now concluded, the TJL Group is on track towards long-term business and profitability growth. "We have effectively and seamlessly integrated both QBL and OCI operations under a single Group operating structure. The Teams have been realigned and the Group is delivering on the concerted efforts as committed. Customers have responded positively to our broader solutions and stronger innovation capabilities, which we leveraged on to rebalance our Customer portfolio to ensure sustained growth. Needless to say, we are operating in an increasingly competitive industry, both globally and locally. Whilst challenges persist, we continue to pursue new opportunities," he said.

With TJL now on an established Regional footing, the Chairman expresses confidence in the Group’s ability to sustain its growth momentum, and towards increasing shareholder value. However, the focus on Innovation, Execution excellence and On Time Delivery would always need to be at the highest levels, he stressed. Teejay is a LMD Top 100 entity, which is jointly owned by Pacific Textiles of Hong Kong, the Brandix Group, and the Public. The Investor community has been responding very positively towards this performance.



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