JKH Chief welcomes Govt.’s thrust for PPPs

• Says move will give rise to opportunities for Group given strong balance sheet

Premier blue chip John Keells Holdings Chairman Susantha Ratnayake has welcomed the Government’s thrust on Public-Private Partnerships and the policy decision will widen opportunities for the Group.

“The economic policy pronouncements of the Governmentsignalled its desire to encourage publicprivatepartnerships and exit investmentsin non-core public owned interests andthis, we believe, will give rise to opportunitiesfor the Group, given our strong balancesheet,” JKH Chairman Ratnayake has said in his review in the company’s FY2016 Annual Report released yesterday.

“The Group is currently evaluating significant investment opportunities across its industry groups,” he said.

“We are confident that investments which we are making today in pursuing a sustainable long-term future will result in improved returns on our capital employed in the medium to long term,” Ratnayake added.

JKH, according to Ratnayake, despite facing a challenging operating environment in FY2016, posted satisfactory underlying business performance.

During the financial year ended 31 March 2016, JKH Group posted a revenue of Rs. 93 billion, up by 2% and a Group profit before tax of Rs. 19.12 billion, up by 3% from the previous year. 

JKH’s bottom line was down 2% to Rs. 14 billion. However, recurring profit attributable to equity holders of the parent rose by 5%to Rs.13.85billion. JKH Group was employing 19,522 people up from 18,981 a year earlier.

Ratnayake said that from a portfolio and diversificationperspective, the investments in JKH’s ConsumerFoods and Retail businesses have borne fruit,contributing towards a diverse stream of cashflows and a more balanced portfolio, where anincreasingly higher proportion of profits aregenerated from businesses with significantlong-term growth potential. 

This year’s Report of JKH has been prepared in conformance with the Integrated Reporting Framework of the International Integrated Reporting Council which focuses on the reporting of the Group’s value creation process.

During FY2016, JKH’s Leisure industry group reported revenues, including share of revenues from associated companies, of Rs.24.31 billion and a PAT of Rs.4.37 billion, contributing 23% and 28% to Group revenue and PAT respectively. The industry group continued to maintain its position as the largest contributor to Group PAT.

The Transportation industry group reported revenues, including the share of revenues from the associate companies, of Rs.16.83 billion and a PAT of Rs.2.45 billion, contributing 16% each to Group revenue and PAT respectively.

The Property industry group reported revenues of Rs.4.34 billion and a PAT of Rs.1.59 billion, contributing 4% and 10% to Group revenue and PAT respectively.

The Consumer Foods and Retail industry group recorded revenues of Rs.36.46 billion and a PAT of Rs.3.23 billion, contributing 35% and 20% to Group revenue and PAT respectively.

The Financial Services industry group recorded revenues, including the share of revenues from associate companies, of Rs.11.90 billion and a PAT of Rs.1.72 billion, contributing 11% each to Group revenue and PAT.

The Information Technology industry group recorded revenues of Rs.8.26 billion and a PAT of Rs.96 million, contributing 8% and 1% to Group revenue and PAT respectively.

The Plantation Services sector recorded revenues of Rs.2.42 billion, contributing 2% to Group revenue, and a PAT of Rs.6 million.

JKH’s total shareholder return (TSR) in 2015/2016 was a negative 12.2%.

Its Board declared a final dividend of Rs.1.50 per share to be paid on 13June. The first and second interim dividends for the year were Rs.4.50 per share and Rs.1.00 per share respectively. The first interim dividend included a special dividend of Rs.3.50 per share on account of the cash inflow of Rs.4.14 billion to the company from the share repurchase made by Union Assurance PLC.

Accordingly, the total pay-out in the year under review was Rs.8.04 billion compared to Rs.3.48 billion in the previous financial year.