Lanka Ceramic Plc has decided to close its retail division due to underperformance.
“As the retail outlets division of the company has been underperforming for a considerable period of time, it was resolved to gradually phase out and cease operations of this division,” Lanka Ceramics said.
The decision was made at Lanka Ceramics Board meeting held yesterday.
The Lanka Ceramic Group (which includes Lanka Walltile, Lanka Floortiles and Horana Plantations) in the first half of 2012 FY, saw turnover grow by 11% to Rs. 4.7 billion and net profit attributable to equity holders grew by 550% to Rs. 126 million. Company’s turnover grew by 48% to Rs. 145 million whilst pre-tax profit was up by 35% to Rs. 68.3 million.
In FY2011 the Company recorded a consolidated turnover of Rs. 8.87 billion for the period under review against a consolidated turnover of Rs. 7.26 billion in the previous financial year. The Group reported a Profit Before Tax from continuing operations of Rs. 1.53 billion and a Profit After Tax from continuing operations of Rs. 1.26 billion.
After taking into account the effect of the discontinued operations, the Group Profit After Tax is Rs. 961 million compared with Rs.895 million in the previous year.
The Company recorded a Profit After Tax of Rs. 73.7 million in the FY2011 against Rs. 210.7 million reported in the previous year.
The profits of the previous year were boosted by capital gains of Rs. 160 million on the sale of properties located at Boralesgamuwa.
Last year the marketing departments of LWPLC and LFPLC were amalgamated. To maximize the resulting synergies, it was decided to adopt a common brand for both wall and floor tiles, thereby erasing from customers’ minds the hint of brand-competition; both wall and floor tiles are now offered under the common brand “LANKA TILES”.
In September last year, the Lanka Walltile PLC publicly announced the decision of its Board of Directors to discontinue operations of the Balangoda Factory consequent to all employees who were offered the Voluntary Retirement Scheme (VRS) accepting the same.
The Balangoda Factory was largely dependent on outdated technology and involved a highly labour intensive operation.
As the said operation was neither profitable nor wholly compatible with the production of its subsidiary Lanka Walltile Meepe (Pvt) Ltd, management had made a strategic decision to close down the Balangoda Factory.