Richard Pieris records Q1 turnover of Rs. 8.2 b

Friday, 16 August 2013 06:45 -     - {{hitsCtrl.values.hits}}

The Richard Pieris Group recorded a turnover of Rs. 8.2 billion during the quarter ended 30 June 2013 with a profit before tax of Rs. 330 million. The reported profit for the year does not include any gains of a capital nature. Retail sector The sector had a very robust performance during the first quarter with many exciting marketing campaigns. The launch of the ‘Buy what you want and not what you get’ campaign created a lot of excitement in the market. The sector also commenced commercial operations in three of its showrooms in the towns of Nittambuwa, Wellawaya and Galewela. The negative sentiments on consumer confidence continued to be evident throughout the quarter under review. The implementation of VAT with effect from 1 January 2013 affected the performance of the sector in the quarter under review as well. Therefore, the company continued to focus on managing overheads and inventory. Plastics and distribution sector The sector faced a range of challenges during the quarter ended 30 June 2013, which included unfavourable market conditions, a sharp slowdown in the construction industry due to bad weather, low purchasing power of consumers and adverse economic conditions. The sector introduced a second brand of mattresses to compete in the lower end of the market and to suit the present market conditions whilst carrying out aggressive dealer promotions. The sector also implemented several new distribution strategies to expand market penetration and to capitalise on synergies. Plantation sector The sector faced a setback in terms of profitability arising from the wage increase and the demand for rubber continued to stagnate in the world market due to the poor economic climate in Europe. Adverse weather conditions also affected the sector performance with a drop in tea, rubber, coconut and oil palm crops when compared with the previous year. Various cost improvement initiatives were implemented to maintain the profitability of the sector. Tyre sector During the period under review, the tyre sector changed its energy sources by introducing fire wood boilers in a positive response to addressing high energy costs. Products introduced towards the latter part of the last financial year were gaining market acceptance and the sector continued to introduce products to suit the lower price segment of the marketplace. Rubber manufacturing sector The sector continued to prosper during the first quarter of 2013/14 with all companies performing well, achieving their respective budgets. The latex foam business continued to thrive with a dynamic management team which enabled the recording of the highest production volume in the recent history. The sector secured several new customers during the period under review and continuous improvement activities in the production floor has enabled further reduction of factory reject rates. The group continues to focus on its core businesses under the present economic conditions but the expansion of the retail sector is expected to continue in the coming year.