TJ records 93% growth YOY; net profit of Rs. 399 million

The TJL Group (TJ), which closed the last financial year on a resounding note, continued its performance momentum in the new financial year, reporting eight straight quarters of strong quarterly profit growth.

The Q1 2016/17 performance has proved to be the Group’s best first quarter recorded to date, posting a consolidated net profit of Rs. 399 million, representing a YoY growth of 93%.

The Group has made significant progress in growing their product portfolio despite challenging market conditions last year.

Group Chairman Bill Lam said that although the company has shown immense resilience and commitment in pursuing new opportunities, leveraging their regional footing, the future of the textile industry is bound to become more challenging.

“Our customers’ demand for low priced and innovative products, discounts and speed of service is increasing and this is true for the entire textile industry. We recognise the need to keep reinventing the wheel, with new technology and automation featuring in our reengineering process to come up with newer and cost effective ways to meet the demand.”

TJ recorded a 73% topline YoY growth and an even more impressive 125% gross profit growth. This was a direct result of consolidation, strategic overhead management and an output increase from changing some of its working models.

This, together with the vastly improved production efficiencies all round, contributed towards the topline growth and translated it to an impressive net profit of Rs. 399 million; a YoY growth of 93%.

The Coal plant continues to support the production engine providing additional leverage to the Group’s core operational margin improvements. The income tax saw an increase of 365% for the Group mainly generated by the consolidation of the deferred tax liabilities of the two acquired entities.

TJ’s cash flow disciplines helped maintain a strong balance sheet from the start of the year, optimising working capital and remaining unleveraged with a net cash surplus of Rs. 3.1 billion. The consolidated Earnings per Share was Rs. 0.57, showing a growth of 83%; while the standalone Earnings per Share of Rs. 0.41 recorded a growth of 41%. 

TJL’s standalone performance during the period under review has been impressive with a net profit of Rs. 286 million, representing a YoY growth of 52%. TJL’s bottom-line grew despite the loss of income due to the non-renewal of its operational technical service agreement with OCI.

The standalone top line growth was 30%, yielding Rs. 3.5 billion, while gross profits grew by 58%. The Group’s performance growth strategies have been applied to TJL with equal rigor, bringing its net profit to a YoY growth of 52%, at Rs. 286 million.

TJ MD/CEO Sriyan de Silva Wijeyeratne said that it was rewarding to see the Synergies of the strategic acquisitions the company has made bear fruit.

“The entire Group structure has gone through positive change, and the team has embraced the changes with passion and dedication which is a main part of our success. It is that very commitment which won us the best Dyer & Finisher of the Year title for the second year running at the prestigious ‘World Textile Awards’. Apart from our people, we have invested in cutting edge technology, seeking broader solutions and honing our innovation capabilities, so that we give of our best to the customer,” he said.

Wijeyeratne added that operating in an increasingly competitive industry, both globally and locally, presents challenges that continues to test TJ’s resilience, constantly driving the company to achieve excellence.

Lam said as the Group embarks on its new financial year it has already begun the groundwork for long range growth plans, commencing work for its future expansions in India, and setting the foundation for broadening its Printing and Synthetic solutions. 

“Whilst the roadmap to increasing growth and shareholder value have been charted out and are underway, we are conscious of the ever-changing global space and the economic challenges it presents,” he said, adding that forward thinking, timely innovation, new synergies and a committed team were imperative to maintain the Group’s lead position in the future. 

TJ was founded in Sri Lanka in 2001. Listed on the Colombo Stock Exchange, TJ is backed by two leading industrialists – Pacific Textiles Hong Kong and Brandix Lanka as its main shareholders. The company supplies to some of the best international brands including Marks & Spencer, Victoria’s Secret, Intimissimi, Tezenis and Calvin Klein.