Ceylon Tea Brokers weathers challenging year

Monday, 9 September 2013 00:05 -     - {{hitsCtrl.values.hits}}

In a challenging financial year ended on 31 March 2013, Ceylon Tea Brokers Plc has succeeded to achieve profits though lower than in the previous year whilst its assets crossed the Rs. 1 billion mark. The company posted revenues of Rs. 204 million, up from Rs. 186 million. Pre-tax profit was Rs. 56.4 million, down from Rs. 64 million and after-tax profit was Rs. 40 million, in comparison to Rs. 56.5 million in FY12. Return on shareholders’ funds after tax was 26.5% as opposed to 40% last year, return on assets after tax was Rs. 3.8%, down from 6.5%. Total assets amounted to Rs. 1.04 billion, up from Rs. 857 million in FY12. “The year under review has indeed been a challenging one for the Company resulting in a more modest performance compared to the previous year,” Ceylon Tea Brokers Plc Chairman Chrisantha Perera said in his review in the company’s 2012/13 Annual Report. He said the decline in profit after tax notwithstanding the positive achievements of the other parameters was due the increase in overheads in an effort to improve the business model, for future growth; higher taxes paid by the company compared to the previous year and prudential provisioning in keeping with the prevailing accounting standards. “I am reasonably confident that the steps we have taken would result in an improved performance in the coming year and we will be able to maintain the growth of the company through professionalism and improved services that are required of a tea broker,” Perera said. In his review Director/CEO Suranga Perera said Ceylon Tea Brokers’ market share based on the quantity of tea sold during 2012/2013 records just under 10% and more importantly amounts to a higher percentage based on value. “We highlight our performance on the value based market share since we as a company concentrate on increasing the value of our catalogue by enhancing the quality aspect of the teas offered through us,” he said. “We strive for this improvement through proper manufacturing advisory services geared to market demands. Consequently the overall sale average of the teas sold through our catalogues reflects an attractive premium over the national average. We have recruited additional personal in order to move in the direction of improving the quality of the teas offered by our clients. We have also built up a great team which in my opinion is capable of servicing a larger volume of tea in the future,” Perera said. He also said the marketing and the manufacturing advisory teams work together and recommendations and changes to the manufacturing process are given to clients in keeping with the market trends. This exercise has assisted in reaping benefits to producer clients, he said adding “Through this endeavour quite a few of our clients have expanded their operations by acquiring new factories and become very successful entrepreneurs.” According to Perera, the company has done particularly well in the low grown segment and currently holds a market share of 14%. This category consists of a greater concentration of privately owned tea factories who are more often than not at the demanding end of the business due to ever increasing competition for the purchase of green leaf. During the FY13 Ceylon Tea Brokers worked closely with service providers ‘Kingslake’ in developing new custom made computer system which will provide customers with important value additions in the near future. The new ERP system is up and running which gives our management, greater confidence in moving forward the operations of the company. This system is designed to minimise the manual data entry and as a result provide accurate and timely information. The year also the company shifting its Head Office premises to a new location at No. 43, Jawatte Road, Colombo 5, which has more space that could accommodate business expansion planned for the future. The Finance Department has also been strengthened to provide clients an efficient service in a timely and accurate manner. “We believe that the company has reached a stage where it is no longer considered a small player in the industry. It has been a great challenge in achieving this position within an industry where change is slow and established ways still considered the norm in doing business,” Perera said. Board of Directors of Ceylon Tea Brokers Plc comprises Chrisantha Perera (Chairman), Ajith Fernando (Managing Director), Suranga Perera (Director/CEO), Waruna De Silva (Executive Director), Shiromal Cooray, Sharmali Perera, B.R.L. Fernando and Ranil Pathirana.