Ceylon Tea Brokers improves profits, market share

Ceylon Tea Brokers Plc has reported improved profits as well as market share during the financial year ended on 31 March, 2011 in comparison to performance achieved in the previous year.

Income of the company had increased to Rs. 275.7 million in FY11 from Rs. 214.5 million in the financial year ended on 31 March, 2010. Pre-tax profit rose by 50% to Rs. 56.69 million and profit after tax improved by 48% to Rs. 34.57 million.

Total assets rose from Rs. 61.0 million to Rs. 787 million in the year ended on 31 March, 2011 whilst shareholders funds grew to Rs. 176.5 million from Rs. 159 million a year earlier.

Quantity of tea marketed through Ceylon Tea Brokers Plc (CTB) in FY11 rose by 37% to 25.6 million from 18.6 million whilst the value of tea marketed saw a near Rs. 2 billion increase from Rs. 7.1 billion to Rs. 9.08 billion.

In FY11 CTB’s market share based on the volume of tea sold had gone up from 6.60% to 8.77% whilst in terms of value of tea sold, the market was a higher at 8.91%. The company described the latter as significant because it indicated a high quality catalogue, which has been CTB’s goal from the inception.

Chairman Chrisantha Perera in his review in the CTB’s 2011 Annual Report said having built up on the success as a Public Listed Company and as a standalone tea broking company it was encouraging to report the improved performance.

He said that the improved performance was not only due to the stronger performance of the tea industry, but was also reflective of the efforts of the company’s management team at all levels, which contributed to this growth.

“I am confident that our company is poised for further growth in the years ahead. This means that we would, as Directors and the Management Team, strive to offer our clients in particular and the Tea Industry in general an enhanced service covering all aspects of tea broking without compromising our core values. This in turn would give our shareholders greater confidence as investors in the company,” Chairman Perera said in his review in the company’s 2011 Annual Report.

He said the corporate objective for the current 2012 FY is “Consolidation through Professionalism.”

Managing Director Ajith Fernando described FY11 as one of growth.

He said that increased market share in terms of quantity and value of tea sold has been possible due to several steps taken including increasing staff strength so that each factory received undivided attention and very close monitoring at all times.

“We found that this focus helped all our clients to not only increase the quality of tea produced, but the resultant increase in the prices obtained at the auction, also helped to increase the quantity produced and their productivity, thereby improving their bottom line as well,” Fernando added.

“Looking at our market share we note that we have a 12.50% share in the low grown category which has more representation by private tea factories. Therefore going forward we intend to try to have a better representation of marks from Regional Plantation Companies as well. At the same time we will try to have strengthen our high & medium and ex estate catalogues as well, so that we will be able to offer the buyers a complete range of high quality Pure Ceylon Tea,” the Managing Director said.

He also said the growth in CTB’s profit has been good and assured shareholders the momentum will be continued by further cost consolidation. “Essentially the infrastructure and capacity of the company at present can easily handle a higher volume of tea and considering that the bulk of the cost are fixed, an increase in volume would have a direct impact on the bottom line of the company,” he said.

In FY11 CTB started the “Golden Cup Awards”, an award ceremony aimed at recognising excellence in production. “By all accounts it was considered a great success in rewarding those who have achieved superior results during the year and in motivating others to improve their quality further. We hope to continue this event in the coming years as well,” Fernando added.

Ceylon Tea Brokers Plc’s Board of Directors comprises Chrisantha Perera (Chairman), Ajith Fernando (Managing Director), Waruna De Silva (Executive Director), Suranga Perera (Executive Director), Rukman Abeywardena, Shiromal Cooray, Sharmali Perera, B.R.L. Fernando and Dinesh de Zoysa (Non Executive Indepedent Director)