People’s Leasing Company records substantial financial growth

By Avanti Samarasekera

People’s Leasing Company PLC (PLC) was founded in 1995, as a fully-owned subsidiary of People’s Bank. Through its 16 years of operation, PLC has now become Sri Lanka’s unshakable leader in the leasing sector, recording excellence in all spheres of leasing. Enjoying its position as the established market leader in this sector, PLC has also contributed immensely to the country’s economic growth and the quality of life in Sri Lanka.

The People’s Leasing Group has, today, diversified to include five fully owned subsidiaries, united under the PLC name. They are People’s Leasing Fleet Management Limited, People’s Leasing Property Development Limited, People’s Insurance Limited, People’s Leasing Havelock Properties Limited and People’s Micro Finance Limited; in addition to owning stakes in People’s Finance PLC.

In keeping with its core business of leasing and the Company’s profitability, which has grown year on year, Chief Executive Officer/General Manager D.P. Kumarage reveals the Group’s third quarterly financial results.

According to him, in the first nine months of the current financial year, the Group’s after tax profit stands at Rs. 3.4 billion, in comparison to Rs. 1.3 billion recorded in the previous financial year. Furthermore, the Group’s asset base is also recorded at Rs. 94.6 billion as of 31t December, against the previous year’s Rs. 63.8 billion.

In addition, the company’s Initial Public Offering (IPO) raised Rs. 7 billion in November 2011 and was earmarked as the second highest IPO in the history of Sri Lanka and the biggest IPO recorded by a home grown company.

PLC is also, perhaps, the only company to achieve the status of market leader, in its chosen sector of leasing, and retain this title for over a decade.

Recognising its significance, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) at its Annual Report Awards 2011, held in December 2011, honoured People’s Leasing Company with a ‘Gold Award’ in the Leasing Sector, while People’s Finance PLC won a ‘Silver Award’ in the Registered Finance Company Category.

Growth, in terms of expansion, extends to the new PLC head office building in Borella, in addition to opening of many branches outstation. PLC uses the parent strength of People’s Bank, already situated in localities around the island, in opening window branches. During the last nine months, five window offices have been opened in several areas of the island, while 11 window offices have been converted into mini branches, and a further two are now fully-fledged PLC branches, with all staff members of these branches being from the local area.

Industry-wise, PLC hopes to further extend its reach in 2012, and become the market leader in other sectors as well, and grab the biggest share of the financial market in Sri Lanka. According to Kumarage, the group’s many subsidiaries are also recording profits, owing to their positive attitude.

People’s Leasing Property Development Limited, which owns the Head Office building of People’s Leasing Company, has also recorded positive results in the year to date; in addition to People’s Insurance Limited, whose corporate accounts should be available to the public shortly.

People’s Finance PLC, which was making losses when it was first acquired by PLC in June 2009, has now shown tremendous growth, making more than Rs. 100 million in profits in just its first full year of operation under People’s Leasing Company PLC and recorded a profit of Rs. 139 million for the first six months of the current financial year. People’s Insurance Limited also recorded an achievement by becoming the sixth largest company in terms of market share, in just two years. People’s Micro Finance Limited is the Group’s social responsibility arm. Making leasing available at reasonably acceptable rates for low income earners is PLC’s contribution to enhancing the lives of these citizens. People of rural areas can lease up to Rs. 20,000 which can even increase up to Rs. 50,000 or Rs. 100,000 depending on their repayment abilities and experience. “The idea is to help these people grow, along with our group, so they will end up as loyal, long-term customers with us,” said Pradeep Perera, Chief Manager – Finance.

PLC also recorded an Interim Dividend of Rs. 0.50 per share, in December 2011, and Rs. 585 million worth of dividends were entitled by the People’s Bank, the parent. This enabled a good payout for all shareholders of the company, and ensured a stable dividend policy.

With the Government cutting down import duty on buses and lorries, PLC feels that this might be a huge booster for the leasing market. With vehicle prices still being acceptable, and with the development of major roads and the southern highway, the company hopes this will create a demand for leasing, which will prove beneficial for the company’s growth.

According to Kumarage, it is this, and other factors, that will enable the company to keep to its budgeted targets in 2012 as well.