CT Holdings reports impressive 3Q results

CT Holdings Plc has recorded a strong performance for the 9 months ended 31 December, 2010 with Group posting an after-tax profit of Rs 1.3 billion, up 113% over the same period last year.  

Profit attributable to equity holders is Rs. 625 million which is a 155% growth over the previous corresponding period.

In the period ended, all sectors reported a sound performance while the Retail and FMCG sectors continue to drive the Group’s growth momentum.

The Retail and Wholesale distribution operation reported a post-tax profit of Rs. 474 million while Food Processing and Restaurant sectors also performed well recording profits after-tax of Rs 350 million and Rs. 91 million respectively. The boom in the commodity market sees the Group’s plantation sector performing exceptionally well. The sector reports an after-tax profit of Rs. 169.9 million. The growth in the country’s construction sector is auguring well for our interests in ceramics and tiles. The sector reports an after-tax profit of Rs. 331 million. The Real Estate sector is now recovering from the market downturn and the future potential for the sector is promising. The Group is now looking to recommence some of the property projects that were deferred during the dip.

During the period under review saw the FMCG sector expanded its businesses with several substantial acquisitions. In November 2010 Cargills (Ceylon) Plc acquired a 73% stake of Kotmale Holdings Plc. A mandatory offer, as per regulations for the balance shares closed on 30 December 2010 and Cargills has increased its stake to 82%. The total cost of the Kotmale acquisition was Rs. 1 billion. The acquisition consolidates Cargills’ interest in the dairy industry enabling the Group to enhance its dairy product range which is currently spearheaded by Cargills Magic, Sri Lanka’s No. 1 dairy ice cream. This would also provide Cargills the opportunity to expand its dairy out grower base and thereby further empower the local dairy industry. Cargills entered the biscuit category in November via Cargills Quality Foods (Pvt) Ltd. with the acquisition of Diana Biscuits Manufactures (Pvt) Ltd. The investment to acquire the production facility located in Nalanda, Matale totalled Rs. 352 million. Diana Biscuits Manufactures (Pvt) Ltd. is engaged in the manufacturing, marketing and distribution of a range of biscuits which fits in well with the current portfolio of products manufactured and marketed by the Cargills Group of Companies. The biscuits range hitherto marketed under the ‘Helan’ brand is to be rebranded and repositioned.

In the period ended the Group subsidiary Parquet (Ceylon) Plc acquired controlling interest of Ceylon Aluminum Industries Ltd. Parquet acquired a 62% stake of the company on 21 October 2010. The move sees the Group positioning itself as a key player in the construction sector which complements its interest in property development.

Lanka Walltile is increasing its capacity by 20% and production is due to commence in the next financial year. This expansion is set to harness the Group’s growth potential in the construction sector in line with the anticipated rise in demand.

Subsequent to 31 December 2010, the newly incorporated subsidiary of Cargills, Millers Brewery Limited entered into an agreement for the sale and purchase of the business and business assets, including the brands, of McCallum Breweries (Ceylon) Ltd., McCallum Brewing Company Ltd., and Three Coins Company Ltd., at a purchase consideration of Rs. 1,425 million.

In relation to this transaction, Millers Brewery Limited has obtained the relevant licenses dated 7 February 2011 from the Excise Commissioner (Revenue) of the Excise Department of Sri Lanka. The acquisition included renowned brands such as ‘3 Coins’ ‘Sando Stout’ ‘3 Coins Riva’ ‘Irish Dark and ‘Grand Blonde’. The Group envisages a consumer shift from hard liquor to soft alcohol and a rapidly growing demand from the tourism sector, which would see strong growth in this category of business.

In the medium to long-term, CT Holdings identifies great potential in leisure, entertainment, property development, construction and branded consumer goods sectors.  Its subsidiaries would be looking to further diversify within these key growth areas whilst consolidating the newly acquired business interests. The Group is confident of improving upon its performance and establishing industry leadership in all its diversified business sectors.