Renuka Agri Foods buys Richlife Dairies for Rs. 505 m

Renuka Agri Foods Plc (RAF) has bought a 76% stake in Richlife Dairies Ltd. for Rs. 505 million.

RAF is a subsidiary of Renuka Holdings Plc.

Richlife manufacturers a range of milk products under the same brand name and a range of fruit products under the Cheers brand.

The portfolio consists of liquid plain and flavoured milk in tetra pack, pasteurised milk in bottles, yoghurt, curd, ghee, ice cream and dairy ream. In fruit products, the company manufactures ready to drink mango, wood apple and mixed fruit juices among others.

The RAF group consists of Renuka Agri Foods Plc, Renuka Organics Ltd., Renuka Teas (Ceylon) Ltd., Kandy Plantations, Renuka Products Ltd., Renuka Trading Ltd. and Ceylon Forestry Ltd.

Grace Kennedy Group, listed on Jamaica and Trinidad and Tobago stock exchanges, owns 34.7 million shares in RAF.

The purchase price of Rs. 505 million is above retained earnings of RAF which was Rs. 455 million as at end September 2011. Total equity of the company was Rs. 1 billion. It also had Rs. 143 million in liabilities (including Rs. 79 million in current trade and other payables) as at 30 September 2011.

In the first half of 2012 FY, RAF’s after tax profit was Rs. 170.7 million, up by 87% from the corresponding period of the last financial year. Group profit was Rs. 173 million. Company revenue grew by 62% to Rs. 861 million and pre-tax profit grew by 81% to Rs. 175 million.

Coco Lanka Plc owns a 50% stake in RAF, whilst among other major shareholders as at 30 September 2011 were Al Nakib (7.8%) apart from a 2.56% stake via the Al Naqib family, Greven Holdings (6.5%), Grace Foods UK (5.6%) and Grace Kennedy Ltd. (3%).