Richard Pieris ends 1Q on strong note, records Rs. 10 b revenue

Richard Pieris Group ended its first quarter on a strong note, reporting a Group revenue of Rs. 10.3 b and a PBT of Rs. 771 m. The reported revenue and PBT signifies a growth of 17% and 22% respectively over and above the previous year. 

The three months ended 30 June resulted in a very robust performance in all sectors of the Group except the plantations sector which was hampered by a drop in prices of all commodities including tea, rubber and palm oil due to external factors. The reported profits represent business profits, and do not include any gains of a capital nature.

The retail sector of the Group comprises of Arpico Supercentres and the network of Arpico outlets scattered islandwide. 

The first quarter of the financial year 2015/ 16 started off vibrantly for the retail sector with the ‘Avurudu siritha’ campaign, which resulted in a lot of hype leading up to the Sinhala and Tamil New Year. 

The focus on marketing activities continued throughout the quarter along with the popular ‘Top tips campaign’. The sector also began commercial operations in two Arpico Daily outlets in the towns of Hanwella and Attidiya during the quarter under review.

The Plastics and Distribution Sector continued its success of 2014/15 and reported a growth of 90% in its reported Operating Profit for the quarter under review over and above the first quarter results of the previous year.

The hybrid mattress introduced to the market in the third quarter continues as a winner with the continuous communication support while been perceived as an innovative brand. The consumer promotion ‘Nidaganna Piyabanna Season 02’ from last year continued during the festive season keeping the excitement in the market resulted in high mattress sales in a given Avurudu season. 

The water tank business was yet again successful during the period under review recording a 40% increase in sales volumes over last year. The rigifoam sales suffered some setbacks due to adverse weather conditions but several strategies were introduced to counter attack and to achieve the set targets. An aggressive Above The Line (ATL) advertising campaign contributed towards a sales growth of 30% in PVC pipes.

The Plantation Sector of the Group experienced a very challenging first quarter facing many adverse factors.

The Richard Pieris Group possesses three of the largest plantation companies in the country with diverse crops which includes high grown, mid grown and low grown tea, rubber, oil palm, coconut, cinnamon, cardamom, rambutan and other crops contributing to more than 15% of Group Revenue. 

The drop in selling prices continues to be the main challenge faced by the sector. On a positive note there was an increase in the production of coconuts and oil palm with the latter gaining better prices when compared to Q1 of the previous year.

During the period under review the tyre sector recorded a steady growth of 44% in its Operating profits over the corresponding period of the previous year. The sector continued to benefit from favourable raw material prices and savings in energy sources which were introduced in the recent past. Richard Pieris Tyre Company introduced a new brand ‘Arpidag Hybrid’ during the first quarter with several new features for improved performance.

The sector continued to prosper during the first quarter of 2015/16 in the backdrop of a very successful 2014/15. The latex foam business continued to thrive and increased its production capacity by 30% by making the appropriate investments. 

With the recovery of its export markets the company is expected to maintain its success. Richard Pieris Exports PLC also managed to report a revenue in excess of Rs. 300 m. Increase in sales of jar sealing rings contributed towards this and the company continued to focus on product quality improvements, reduction of wastage and overhead reduction programs. The shoe soling business of the sector reported positive results and made its first shipment to Vietnam. It also developed several new products to cater to export markets 

Though the Group is focused on its traditional businesses, diversification into financial services was successfully ventured over the past few years. At present Richard Pieris Group consists of its own life insurance, stock broking, fund management and a finance company. 

Richard Pieris Finance Ltd. (RPFL) continued to expand its business base and is gaining momentum in a highly competitive industry. Arpico Insurance PLC, which is now on its fourth year of operations continued to establish its position in the industry.

With a solid 1Q performance the Group is well geared to face up to the challenges for the rest of the year and a spokesman for the company said that the outlook for the rest of the financial year is promising.

Richard Pieris & Co. PLC is a diversified business conglomerate with a rich history of 83 years. Its flagship brand Arpico is one of the most powerful local household brands in Sri Lanka for over 50 years, serving the community with a diverse range of products across many sectors such as manufacturing, plantations, financial services, exports, FMCG, construction, logistics and retail. 

The retail sector led by its flagship brand Arpico Supercentres operates one of the largest modern trade chains in the country. A diverse melting pot of talent, comprising a workforce of over 35,000, Richard Pieris & Company PLC is one of the largest employment providers in the private sector in Sri Lanka.