JOHN KEELLS HOLDINGS PLC (JKH.N0000)

I think they can adjust the cost with some modifications + re calculations.

Their estimated cost 770million for 4.5 million sqft = 171 US$ per sq foot. seems to be at international rates.

If you compare Dubai Silicon Oasis , with very high cost of construction employing foreign labour,  their approx. cost was below 150 US$ and selling price of sq ft was 177  US$ in early 2014.

It is true the prices have escalated but considering our working environment and availability of local sub contractors I think  they may get some jobs done below estimated amounts after doing some changes, specially by deleting unwanted and unmatched high cost interior and exterior ideas of money wasting architects.


Dubai Silicone Oasis

I agree with Chinwi, costs can be adjusted and the original design included a costly Casino which is no longer included.  I'm sure there'll be design flexibility to ensure that if the government of the day permits, a casino can still be retrofitted.  The game's got tougher but for a conglomerate like JKH there's always a game changer in the cards.   Very interesting thoughts across this thread, time will tell but time is kind on well run companies.  Meanwhile, this year looks on track for another all time record for profits and one of the most impressive PE ratios ever.  Yes, they will even beat Perpetual treasuries' profits!

Can they make profits without having casino business? Most property developers are facing hard time due to competition to sell their products.

JKH a bit over valued !

I am not positive with JKH and its Future...Profit wise this year or Next year other strong compenies will beat JKH ...I expect JKH will trade somewhere around 100-120 next year...

Tomorrow i am going to completly exit from JKH.I don't know my decision is correct or wrong..But if the right issue is coming i don't have money to invest...Then i think this is a correct way to do.....

Brinthan wrote:I am not positive with JKH and its Future...Profit wise this year or Next year other strong compenies will beat JKH ...I expect JKH will trade somewhere around 100-120 next year...

after the warrant conversion this could come down to 130 levels..

A recent Analysis of John Keells done by an International Fund Management Company. Some say Khazanah Nasional Berhad Fund of Malaysia will start shedding the shares.

Sri Lanka's John Keells at a Decisive Moment and at a Miserable Future until 2020


In order to fund the Watefront Project (Cinnamon Life) JKH raised Rs.23.1 billion (approx US$ 178mn) in FY 2013/14 by way of a rights issue attached with two types of warrants. Subsequently by excising the warrants Rs.8 billion was raised in 2015 but however the 2016 warrant was heavily undersubscribed. Only Rs.3.2 billion was raised from it though it was supposed to raise Rs.8.6 billion. This was because investors were doubtful about the success of this project and how wisely JKH has used the cash from the rights issue.

Extraordinary gains and interest income from the recent rights issue have buoyed earnings during the last several years. In 2016, interest income of Rs.8,011mn amounted to the 42% of PBT and far exceeded the best performing leisure sector which posted pre-tax profit of only Rs2,311mn. Going forward, such large amounts of interest income may not recur as rights issue proceeds will get utilized in the Water Front Project in the next two years.  

"Waterfront Project” is now behind schedule and there has been a cost overrun in the piling stage of the project due to unanticipated barriers. Officially there has been an acceptance of an 18 month delay by Hyndai, Keangnam, & Nawaloka (HKN-Joint Venture) that would result in reduction in profitability of the project.

During FY 2015/16 ROCE of all sectors of JKH have improved. However excluding the Food & Retail, Financial Services, and Transportation Sectors all other major sectors’ ROCE is below the 12 month Treasury Bill yield, with some sectors operating at less than half the TB rate.

JKH management sold down their stakes in Union Assurance, Access Engineering and Expo Lanka Holdings and recognized capital gains of Rs2.2 billion in 2014/15. Reasons for this move have not been satisfactorily explained. As JKH has sufficient cash, perhaps these sales demonstrate a pre-occupation with short-term earnings rather than a long-term strategic focus. However investments in hotels which JKH management are eyeing to dispose are rather difficult to be sold immediately.  Hence there won’t be any capital gains realized through sale of investments in the near future.  

Waterfront Project is the largest private sector investment to date in Sri Lanka with an estimated cost of approximately USD 800 Million. The company has entered in to USD 395 Million syndicated loan facility with Standard Charted Bank being the required debt financing for this project. The massive interest cost of this syndicated loan will be capitalized in to fixed assets under the accruals basis of accounting. However after completing the project the interest cost will get charged to the income statement as an expense which will significantly reduce profitability. The income generated from various buildings of the project will take many years to exceed the interest charge.

Take the plight of an investor who looked at JKH 2012/2013 Performance

Performance of JKH FROM 2012/13 TO 2017/18 Financial Year

	2017/2018	2012/2013	5 Year CAGR
Turnover Rs Mn	121,215	85,408	7%
NP after Tax	23,120	13,433	11%
EPS-adjusted	15.2	10.7	7%
NAVPS-adjusted	144	64.7	17%
DPS-adjuted	6	2.149	23%
ROE	11.1%	15%	Not Applicable

Best Investment Scenario of an investor  who had bought JKH @ LOWEST traded price of 243/50 in Apr-June 2013 and SELLS @ HIGHEST Traded price of Rs. 168/- in Apr-June 2018. After Rights & converting warrants and receiving Dividends, the luckiest investor would have earned only a very disappointing 2% Compounded Annual rate of Return over the 5 year period despite BUYING LOWEST & SELLING HIGHEST, which is the best Scenario. 

Those who would have bought at median prices would have earned virtually zero compounded annual interest on their investment

Heavy trading in John Keells (JKH) with over 1.5% of company changing hands-November 5, 2018 

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 Sri Lanka’s constitutional crisis has lit a fire under the counrty’s stock market sending trading volumes soaring. Trading at the Colombo Stock Exchange passed the Rs4bn (US$23mn) mark with the trading day nearing a close.

Trading volume is being driven by transactions in market bellwether John Keells Holdings (JKH). Over Rs3.5bn worth of shares have transacted today amounting to approximately 1.5% of the company. Trading in JKH since the start of the political crisis has been driven by foreigners selling and locals buying.

Most of the shares transacted today have been at a price close to Rs150/share. A few weeks before the crisis the stock bottomed at Rs126/share and post crisis had jumped as high as Rs155/share before settling at todays level, where significant transactions are taking place.

http://www.lankabusinessonline.com/h...hanging-hands/

November, 8, 2018

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Sri Lanka’s one of the oldest Carbonated Soft Drinks (CSD) range including Elephant House brand that’s owned by John Keells Group had experienced a 31% drop in their sales volume of beverage business due to the implementation of a sugar tax on CSD from November 2017, the latest quarterly review of John Keells Holdings (JKH)’s Chairman Susantha Ratnayake highlights.

Ratnayake notes that the Consumer Foods industry group Profit Before Tax (PBT) of Rs.443 million in the second quarter of Financial Year 2018/19 is a decrease of 40% against the second quarter of the previous financial year of 2017/18 Q2: Rs.738 million.

“The decline in profitability is primarily on account of a volume decline of 31% in the carbonated soft drinks (CSD) range of the Beverages business and costs relating to the commissioning of the new ice cream factory as discussed below” he points out adding that that the decline in beverage volumes is due to the implementation of a sugar tax on CSD from November 2017, which resulted in substantial price increases across the industry.

“However, it is encouraging that the growth in monthly volumes within the quarter has been on an upward trend. The performance of the non-CSD product range continue to be encouraging. The Frozen Confectionery business recorded a volume growth of 8% during the quarter under review, driven by growth in the impulse segment” Ratnayake notes in his review. According to him whilst the business recorded volume growth, profits were impacted by plant commissioning and startup costs due to the gradual ramp up of production at the new manufacturing facility in Seethawaka and the depreciation and finance expense relating to the investment. The new facility will be pivotal to the longterm growth prospects of the business, given its scalability of product range and volumes and higher operational efficiencies.

​​​​​​​http://bizenglish.adaderana.lk/jkh-experience-a-31-volume-drop-due-to-sugar-tax-on-carbonated-soft-drinks-range/

Harry, Captains up stakes in John Keells Holdings (JKH)-November 8, 2018

November 8, 2018 (LBO) – Colombo Stock Exchange market bellwether John Keells Holdings (JKH) reported its quarterly results last night, which included an update of its top 20 shareholder list. Notable trends included foreign selling and local buying.

In particular, Harry Jayawardena controlled Melstacorp upped its stake from 3.5% of the company to a 4% holding. The Captains also upped their stake to 17.5% from 16.6%. The bulk of the Captain’s holding is in the accounts of S.E. Captain and Paints and General Industries Ltd. It is possible that Jayawardena and the Captains have additional smaller holdings in JKH titled in other names that don’t appear in the top 20 shareholders list.

As of September 30, 2018, The Captains and Jayawardena together own at least 21.5% of the total outstanding shares of the company. It is likely that these holdings increased in October as there was significant local buying and foreign selling during the month.

After spiking to Rs155/share, the stock price of JKH as come back down to Rs142 in todays trading as Sri Lanka’s constitutional crisis continues to drag. Net asset value of the share at the end of the September quarter stood at Rs151/share.

Some analysts have speculated that if foreigners continue selling shares, that JKH will become vulnerable to a hostile takeover.

http://www.lankabusinessonline.com/harry-captains-up-stakes-in-john-keells-holdings-jkh/

OFFER TO REPURCHASE ON A PRO RATA BASIS OF 1 SHARE FOR EVERY 20 SHARES HELD UP TO A MAXIMUM OF 69,376,433 ORDINARY SHARES AT RS.160.00 PER SHARE

https://cdn.cse.lk/cmt/uploadAnnounceFiles/2681541995328_508.pdf

Sri Lanka's JKH share buyback not liable for tax: official

Nov 13, 2018 

An 11.1 billion rupee share repurchase by John Keells Holdings Plc will not be taxed under a new law since the funds returned to shareholders are from a dividend reserve, a top official said.

"This is being paid out of tax-free dividend reserves," Deputy Chairman Krishan Balendra said.

He said the tax had already been levied at the point when JKH subsidiaries remitted the dividends to the parent.
Therefore, the dividend reserves being used for the share buyback is not liable for an additional withholding tax.
The new Inland Revenue Act which came into force this April brought all forms of dividend, including share repurchases and issuances of bonus shares into the tax net at a rate of 14 percent.

In some countries with capital gains tax, share buybacks are not taxed on the principle that a rise in the share price after a buyback (if the shares are sold) will increases taxes to the state.
JKH will buyback stock at 160 rupees per share.
The stock has gained in recent weeks ahead of the buyback.
It gained 6 rupees yesterday. The share was up a further 2 rupees to 153 rupees in early trading today. 

https://economynext.com/Sri_Lanka_s_JKH_share_buyback_not_liable_for_tax__official-3-12578-3.html

Active trading in shares of John Keells Holdings (JKH)

December 20, 2018

Trading at the Colombo Stock Exchange (CSE) picked up with active trading in bellwether stock John Keells Holdings (JKH).

JKH traded close to Rs2bn (US$11mn) worth of shares as trading neared the close for the day. The amount of shares traded today is close to 1% of the total outstanding shares of the company. The shares were traded at prices close to Rs160/share (the price at which the company has an open stock buyback offer).

The market capitalisation of JKH sits close to US$1.2bn, and the stock is trading close to book value.

For the last few months, JKH has seen foreign institutional selling to local buyers. For the most part, the local buyers have been Harry Jayawardena controlled Melstacorp, and the Captian family. Together these entities are speculated to already own over 25% of the total outstanding shares of Sri Lanka’s most important company.

http://www.lankabusinessonline.com/active-trading-in-shares-of-john-keells-holdings-jkh/

what will happen to jkh price in near future? Should we sell it? price will be decrease?

sssmax wrote:what will happen to jkh price in near future? Should we sell it? price will be decrease?

'JKH's FOREIGN HOLDINGS THINNING FAST'
(Business Times of today)

Prices may be slashed further!

Susantha Ratnayake bids farewell to JKH, Balendra junior in as Chairman

January, 1, 2019

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Sri Lanka’s leading conglomerate – John Keells Holdings’ Chairman Susantha Chaminda Ratnayake retired at the end of 31st December 2018 after a long tenure in the company, making way for a new team to take over the reins at the country’s largest listed conglomerate, as announced in the Group’s succession plan.

Ratnayake served as the Chairman of the company since 2006. And the succession plan has outlined that Krishan Balendra (a son of former JKH Chairman Kandiah Balendra) will assume office as the Chairman/CEO and Mr. Gihan Cooray as the Deputy Chairman/ Group Finance Director, with effect from 1st January 2019.

In the last quarter of September 2018 JKH group revenue rose by 10% to Rs.32.57 billion for the period under review, the challenges the organization face came from the leisure sector owing to lower occupancies in its Colombo hotels sector – a common problem faced by 5-star hotels due to an over- supply of accommodation – and closure of some properties for refurbishing.

http://bizenglish.adaderana.lk/susantha-ratnayake-bids-farewell-to-jkh-balendra-junior-in-as-chairman/

John Keells bolsters market share
13 January 2019

The John Keells Group has invested to expand capacity and capability with local and foreign expertise and seize the growth opportunity in all its verticals.
The new JKH Chairman Krishan Balendra told the Business Observer that the company is building new hotels and refurbishing some properties in Sri Lanka and the Maldives.
He said the Group is aggressively expanding its supermarket chain along with many expansionary moves, such as launching the Tri-Zen apartment project, completing a new ice cream plant and building a distribution centre for the logistics business.

“The scale of the investment that the John Keells Group is making across our verticals would surpass any other business organisation in the country.
This is a reflection of our confidence in the growth opportunity for our businesses,” Balendra said while adding, that the Group has developed medium to long term plans for its business verticals.

John Keels Holdings PLC is the largest listed conglomerate in the Colombo Stock Exchange with businesses abroad as well. The Group operates three hotels in the Maldives.
“The country will continue to see reasonable economic growth despite political volatility. This augurs well for business. There are negative sentiments, but if you look at the economic growth and improvements in social indicators that the country has achieved over many years, despite the war against terrorism and other issues, there is good reason to be positive about the future,” Balendra said.

He said the demand for hotel rooms in Colombo continues to grow.
“We believe the supply side will improve over time. Some new developments such as the Cinnamon Life project will introduce big malls and large conferencing and banqueting spaces which are absent in Colombo.

“This will create a new regional market for the city. While the number of new rooms may seem high compared to what we had, it is small compared to regional cities. While in the short term there is an oversupply, we are confident that this will change with time,” he said.
From managing hotels to providing port, marine fuel and logistics services to IT solutions, manufacturing of food and beverages to running supermarkets, tea brokering to stock brokering, life insurance and banking to real estate, the Group has its presence in all major sectors of the economy.

The Group, since its beginning in the early 1870s as a producer and exchange broker, is known for re-inventing and repositioning itself in new avenues for growth. 


http://sundayobserver.lk/2019/01/13/business/john-keells-bolsters-market-share

Sri Lanka's JKH net up 7-pct in Dec quarter

Feb 01, 2019 

Sri Lanka's John Keells Holdings, which has operations in logistics, leisure, consumer goods and financial services said profits grew 7 percent from a year earlier in the December 2018 quarter to 4.8 billion rupees, helped by container operations and a forex gain.

The group reported earnings of 3.46 rupees per share. For the nine months to December JKH reported earnings of 8.71 rupees per share, on total profits of 12.0 billion rupees which were up 9 percent.

Revenues grew 17 percent to 36.5 billion rupees, cost of sales grew at a faster 20 percent to 29.1 billion rupees and gross profits grew 7 percent to 7.37 billion rupees.

Finance income grew 48 percent to 3.8 billion rupees, helped by gains in foreign currency cash holdings.

On December 25, the firm had paid out 11.1 billion rupees to shareholders in a share buyback.

Pre-tax profits at its transportation group had risen 16 percent to 1.1 billion rupees with its container terminal in Colombo port growing volumes 8 percent. SAGT had handled an all time high of 2 million containers in 2018, out of a total of 7 million at the port.

Though Lanka Marine Services, JKH's ship bunkering unit had seen volumes grow 7 percent, profits had been hit by a sharp fall in oil prices.

​​​​​​​https://economynext.com/Sri_Lanka_s_JKH_net_up_7_pct_in_Dec_quarter-3-13313-3.html

John Keells Holdings is #rockNgold #Solid.

Hold on to it!

According to the market research it will be 175 end of the month

Can. Witness lot of transactions .

Fundementally JKH no value 175 LKR

Fundamentals are not relate every time taller

Are you sure target 175?

Lot of transection  at  Rs 150