People’s Finance 1Q profits up by 50%

Monday, 27 August 2012 00:18 - - {{hitsCtrl.values.hits}}

People’s Finance PLC has yet again had another outstanding quarter. The company saw its revenue rise nearly 63% in the June quarter, led by growth in the revenue generated from finance leasing, hire purchase, loans and advances and Islamic credit.

People’s Finance continues its growth momentum after its acquisition by People’s Leasing Company PLC; the country’s largest leasing company.

People’s Finance PLC was operating under the name Seylan Merchant Leasing Limited (SMLL) until it was acquired in June 2009. Subsequent to the acquisition, once a loss-making company, it now exhibits exemplifying results, which only seem to amplify quarter to quarter.

The company proudly filed its provisional results with the CSE which showcase its first-rate achievements this quarter. The company reported Rs. 83 million profit after tax for the June quarter, which translating to a YoY growth over 50%.

The company recorded a total interest income of Rs. 604 million for the quarter compared to Rs. 364 million in the same quarter a year earlier, which depicts a significant growth over 65%.

Interest income accounts for about 98% of June quarter revenue. Islamic finance is the key revenue driving force for People’s Finance PLC, which accounts for 31% of the total revenue for the quarter with five dedicated branches in the Eastern Province, North Western Province and Union Place.

In line with the one-year Treasury bill rate rising from 7.35% in June 2011 to 12.88% in June 2012 the company witnessed its interest expenses rise from Rs. 205 million to Rs. 368 million.

Despite the slowdown in vehicle demand due to the recent duty hike, the company’s lease and hire purchase portfolio has escalated to 11.63 billion, translating to a YoY growth over 59%.

As a collective result of the aforesaid, the company has been competent to record a net interest income of Rs. 236 million against Rs. 159 million for the June quarter in the previous year, which depicts an outstanding growth over 48%.

The company continuing its growth momentum in gaining customer confidence and trust resulted in expansion of its deposit base to Rs. 11,168 million at the end of the 1Q from Rs. 8,164 million in the 1Q of financial year 2011/12. The total assets and total shareholders’ funds of the Company stood at 15,743 million and 1,784 million respectively as at 30 June 2012.

People’s Finance PLC in its quest to bolster wealth for its shareholders paid an interim dividend of Rs. 2.50 per share in June 2012 over the Rs. 1.25 per share in the previous financial year.

Reflecting upon augmenting past performance of the company it can be sagely deduced that People’s Finance PLC has the potential to grow even more exponentially as it confidently outperforms the prevailing challenging economic setting of the country.