Access Engineering Limited which last February acquired the controlling interest of Sathosa Motors PLC sees the acquisition as an opportunity for diversification enabling the future growth of the company, Sathosa shareholders have been told in the companyannual report.
Access Chairman, Sumal Perera, who previously served as non-executive Chairman of Sathosa Motors under the control of the previous Japanese controlling interest has now become its Managing Director/CEO.
Perera has told shareholders in his Managing Director’s report that in March this year the Itochu Corporation of Japan have sold its full stake in the company to Access Engineering at Rs.235 per share.
Subsequently, Access had made a mandatory offer to other shareholders and as at date acquired 81.55% of Sathosa Motors.
Mr. Ajita de Zoysa, previously Chairman of AMW has been made Sathosa’s new Non-Executive Chairman. Perera said that de Zoysa’s experience in the commercial and automobile field in Sri Lanka "is in my opinion second to none and (we) look forward to his guidance and advice in this new era of the company."
Mr. A.I. Lovell has been made Deputy Chairman of the company with the other directors comprising Perera’s colleagues on the Access board.
Sathosa Motors which was set up in 1962 when the CWE obtained the Isuzu agency in Sri Lanka now plans to expand this business into the major cities in the country and also look at complementary business with sustainable growth potential, Perera has told shareholders.
The Sathosa annual report says that Sathosa Motors considers Access buying into the company as an opportunity for diversification while Access considers the acquisition a good strategic investment and plans to acquire and partner with reputed brands/agencies for engineering and construction related products without being solely dependent on the Isuzu brand which will continue to be the core business.
The year ended March 31, 2012 saw Sathosa Motors posting gross turnover of Rs.1.9 billion, a pre-tax profit of Rs.245.7 million and an after-tax profit of Rs.175.8 million.
The company’s Executive DirectorTilak Gunasekera said that the Isuzu was the country’s leading vehicle brand for the light duty commercial categories.
The year under review had seen their new vehicle department recording a net turnover of Rs.1.53 billion selling 427 units with their business volumes up 35.53% and the number of vehicles sold 29% up from the previous year.
Gunasekera said that the Isuzu N Series Reward has a monthly sale of over 35 units which is a satisfactory figure against the stiff competition they faced.
"Despite the entry of cheaper Indian and Chinese manufactured vehicles, the company managed to maintain a steady market share throughout the year," Gunasekera said.
"The Isuzu brand currently has well over 100,000 vehicles on the roads of Sri Lanka which alone speaks brand’s high acceptance in the local market."
The company has revalued its property at Peliyagoda with the land valued at Rs.120 million, the buildings at Rs.20 million and plant and machinery at Rs.3.5 million. However these values have not been incorporated into the accounts during the year under review.
The directors have proposed a final dividend of Rs.5 per share for approval by shareholders at the company’s AGM later this month.
Access Engineering held 77.1% of Sathosa Motors as at March 311, 2012, followed by Lakshmans Housing and Construction (10.07%) and Mr. R.N. Nanayakkara (2.79%).
The net asset value per share of the company was up to Rs.98.64 during the year under review from Rs.74.51 a year earlier and the share traded at a high of Rs.469 and a low of Rs.160.20 during the year. This compared to a trading range of Rs.265 to Rs.112.50 the previous year.
`The directors of the company are: Messrs. Ajita de Zoysa (Chairman), Sumal Perera (MD), Tilak D. Gunasekera (Executive Director), M.M.N. de Silva, R.J.S. Gomez, J.C. Joshua, S.H.S. Mendis (Alternate to J.C. Joshua), S.D. Munasinghe (Alternate to R.J.S. Gomez) and A.I. Lovell.