Printcare PLC, manufacturers/printers of tea bag tags and envelopes and different types of cartons with a sizable export business, has seen both turnover and profits drop in the year ended March 31, 2012 which had nevertheless remained the second best for the company since its inception 31 years ago.
Printcare Chairman Merrill J. Fernando said that turnover for the year at Rs.3.25 billion was down 6% from Rs.3.45 billion the previous year and the profit before-tax of Rs.203.7 million, down 21% from Rs.259.1 million a year earlier, was largely attributable to factors affecting the global tea industry due to turmoil in the Middle East.
He said that while the company had experienced a setback in sales in its tea tags and envelopes division due to this reason, direct exports had done well.
"Our overseas customers are beginning to appreciate the quality of our service and they are steadily increasing their reliance on your company," Fernando told shareholders in the annual report.
Their carton division had delivered what the chairman called "encouraging results" boosted by growth in export sales despite overcapacity in this industry which hurt margins.
Printcare’s special design capabilities servicing the higher end of the market had stood the company in good stead with their products winning all three packaging segments at the National Awards last year.
"(This) endorsed our position as the finest printing and packaging company in Sri Lanka," he said.
The company’s security printing division, focusing mostly on pre-paid telephone cards, lottery tickets and promotional games, is still unfortunately underperforming despite being the only company in the country equipped to deliver high quality lottery tickets, Fernando said.
However their efforts to win the local tender had continued unabated and he was hopeful that ``this situation will change soon."
With the company firmly established as the principal supplier of high quality telecom pre-paid cards, their export volumes were making steady progress in the face of "invasive competition offering unsustainable prices and relying on less than ideal manufacturing processes in an effort to win market share."
He expected that their digital media operation, "a very small and nascent but exciting part of the business," to be an area that will provide growth over the next decade.
"This division is currently developing some innovative products and services. I hope to report interesting developments next year," Fernando said.
The directors have recommended the payment of a final dividend of Rs.0.40 per share giving a total dividend of Rs.0.75 for the financial year.
Printcare has a stated capital of Rs.471.9 million, group reserve of Rs.338.1 million and retained earnings of Rs.519.7 million (group) in its books. The company’s reserves were Rs.96 million and retained earnings Rs.151.5 million.
The group comprises nine companies including one in India manufacturing and printing tea bag tags and envelopes. Other subsidiaries are engaged in manufacturing and printing of packaging materials for food-grade and non-food grade consumer items, printing and binding of books, magazines, brochures and catalogues, exporting of printed papers and boards; graphic designs, prepress and pre-media services; specialized printing of products with security features; manufacturing and printing of tea bag tags and envelopes and graphic design.
Net assets per share had grown to Rs.13.14 from Rs.11.87 the previous year while the company’s share closed at Rs.31 during the year after subdividing each existing share to five from Rs.128 the previous year.
MJF Holdings with 26.87%, Dr. T. Senthilverl with 23.83% and Mr. K.R. Ravindran with 20.83% are the major shareholders of the company.
The directors of the company are: Messrs. Merrill J. Fernando (Chairman), Abbas Esufally, K.R. Ravindran, Ejaz Chatoor, Dayasiri Warnakulasooriya, Ms. Anushya Coomaraswamy and Simon Scarff.