Cargills Ceylon PLC reported a 9.7% growth in turnover for the year ended and a 19.0% growth in top line for the quarter ended to close the year at Rs. 61.6 Bn.
The revenue growth is largely stemming from a strong performance from the FMCG segment while Retail and Restaurants businesses have also stabilized during the last quarter.
The Group reported a net-profit of Rs. 598.0 Mn for the year which includes a Rs 352.7 Mn one-off gain from the disposal of Millers Brewery Limited and a provision for impairment in value of Goodwill and Investments amounting to Rs. 180.9 Mn. Group profit after tax for the fourth quarter was Rs. 317.2 Mn.
The Retail sector reported a turnover of Rs. 51.4 Bn for the year with 'deemed VAT' continuing to hamper the market potential of locally sourced rice, fruits, vegetables, meats and seafood. Supermarkets can only claim 25% of its turnover as Non-VAT liable regardless of the composition of its turnover.
Nevertheless during the year the Company paid Rs 870 Mn as 'deemed VAT' on VAT exempted products compared to Rs. 130 Mn paid as 'deemed VAT' in the previous financial year.
The decline in Operating Profit to Rs. 918.0 Mn from Rs. 1.9 Bn in 2013/14 was largely attributed to this impact. The ad-hoc VAT policy has far-reaching implications on smallholder farmers and your company is continuously engaging with policy makers to reach consensus on applying the policy in a manner that would stimulate growth in local agricultural produce.
During the fourth quarter the equity investment into the Retail Sector by IFC was completed with the latter subscribing to an 8% stake of the business at a pre-equity valuation of approximately Rs. 30 Bn. In this regard a contingent liability valued at Rs. 1.9 Bn is booked under Group equity.
The FMCG Sector has returned an impressive performance during the year with a turnover growth of 15.6% over the previous financial year to reach Rs. 12.4 Bn.
The Confectionaries business reached EBITDA positive during the year, with a significant turnaround in the 2nd half of 2014/15 attributable to strengthening the management team and enhancing efficiency and productivity of the facility.
The Restaurants business stabilized during the quarter under review with the KFC franchise returning to profit during the last 4 months of the year while TGI Fridays is yet to turnaround.
Courtesy: Daily News 04 June 2015