Hayleys buys textile firm from Ambeon for Rs. 4 b

Saturday, 24 April 2021 01:18 - - {{hitsCtrl.values.hits}}

Hayleys Fabric Plc yesterday acquired the control of South Asia Textiles Ltd. (SAT) for Rs. 4 billion as part of expanding its business.

Hayleys bought 98.84% stake of SAT comprising 97.68% from Ambeon Holdings Plc and 1.16% from a minority shareholder.

“This acquisition supports Hayleys Fabric Plc’s strategic plan to expand capacity for higher value-added fabrics for exports by aligning with world-class Tier 1 brands under its portfolio of customers,” Hayleys Fabric said.

Post-announcement Hayleys Fabric share gained by 5% to close at Rs. 16.40 whilst Ambeon Holdings improved by 3% to Rs. 22.

Formerly Hayleys MGT Knitting Mills, Hayleys Fabric in the first nine months of FY21 reported pre-tax profit of Rs. 583 million, up 25% from a year earlier. Revenue grew by 11% to Rs. 11 billion.

In the third quarter, top line growth was 24% to $ 3.8 billion whilst pre-tax profit saw a massive jump of 262% to Rs. 235 million. In FY20 revenue was Rs. 12.2 billion and pre-tax profit was Rs. 304 million and after-tax profit was Rs. 231 million. Its assets were Rs. 10.8 billion as at 31 December 2020.

SAT in FY20 achieved a revenue of Rs. 9.1 billion, as compared with a previous Rs. 8.3 billion, reflecting a growth rate of approximately 10.17% Year-on-Year (YoY), while reporting a Profit After Tax (PAT) of Rs. 23.2 million. As at end FY20, SATS had Rs. 6.2 billion in assets and 1,116 employees.

In the first nine months of FY21, Ambeon’s textile business had Rs. 6.3 billion in turnover, down from Rs. 7.4 billion a year earlier and suffered a loss of Rs. 417 million as against a profit of Rs. 191 million. Its assets amounted to Rs. 4.8 billion, down from Rs. 6.7 billion.

Established in 1993, Hayleys Fabric is a pioneer in weft knit fabric manufacture in Sri Lanka.

It is presently recognised as a world-class fabric manufacturer with a high degree of innovative capabilities with its own brand, INNO.

Hayleys Fabric PLC, has the capability of delivering over three million metres of fabric per month. The product offering includes knitting, dyeing, printing, brushing, sueding and finishing. The product range includes Single Jersey, Interlock, Pique, Rib, Fleece and Polar Fleece, Jacquard and Flat Knits, which are composed using pure and blend of cotton, polyester, viscose, modal yarns, in both solid colours and in printed form.

Since last year it has shifted focus towards sustainable innovations using recycled yarns from PET bottles collected from the shoes of Sri Lanka, organic yarns to further aligning its operations to become a socially responsible, ethical and a versatile commercial entity with a great degree of transparency.

The company works on a business model to establish strategic partnerships with its selected Tier-1 customers such as L-Brands, Calzedonia, Nike, NEXT, Decathlon, PVH and Asics.

A BOI certified company operating in Sri Lanka since 2004, SAT specialises in producing exceptional quality weft knitted fabric for leading global brands such as Victoria Secret, Next, Marks & Spencer, Tesco, Calvin Klein, Decathlon and Adidas.

Since the company’s acquisition by Ambeon in 2011/12, SAT has consistently expanded the scale, quality and sustainability of its operations, resulting in a healthy CAGR over revenue of 7.74% over the past five years.