23 May 2011

John Keells Holdings Posts Highest Ever Profit After Tax of Rs9.06bn with a Revenue of Rs60.5bn

21st May 2011, www.island.lk

John Keells Holdings (JKH), the diversified conglomerate, has posted the highest ever profit after-tax in the company’s history for the financial year ended March 31,2011 with a group revenue of Rs.60.5 billion, up 26% from a year earlier, and an after-tax profit of Rs.9.06 billion, up 63% from the previous year.

The group’s pre-tax profit was Rs.10.6 billion, with JKH and Dialog Axiata being the only two companies to reach this mark up to now. Analysts said that it was possible that the Carsons group too would achieve this benchmark in the financial year ended March 31, 2011.

In results filed with the Colombo Stock Exchange on Friday, JKH said that Rs.8.25 billion of these earnings translating to earnings per share of Rs.13.24, was attributable to equity holders of the parent.

JKH also announced to the CSE that it would be paying a third interim dividend of Re.1 per share on top of two interim dividends each of Re.1 per share already paid to give shareholders a return of Rs.3 per share for the year under review.

Asked why the company was not increasing its dividend payout in the context of the superior performance, a senior official company said that several projects, many of them with long gestation periods, are being looked at and the directors thought it best that the previous year’s dividend level is maintained.

``Otherwise you raise shareholder expectations that may be difficult to satisfy,’’ he said. ``We had that experience when we paid a special dividend of Rs. 2 per share a couple of years ago and many shareholders believed this would continue.’’

He said that although the dividend level was the same as in the previous year, the company was doing a share sub-division under which every three shares would be sub-divided into four.

"Once the sub-division is done, our share price would necessarily go down but shareholders, in terms of the share price of their increased shareholding, will have a substantial capital appreciation convertible to cash if they so desire," he said.

The Employees Provident Fund has increased its stake in JKH from 5.7% at the end of last year to 7.1% as at March 31, 2011 while the Insurance Corporation too owns 1.8%, same as what it held at the end of last year.

Analysts did not discount the possibility of the state sector seeking a place on the JKH board should the collective holding reach a substantial level of around 15%.

Mr. S.E. Captain remains the biggest individual shareholder of JKH with his personal holding together with those of connected parties topping 20%.

In the year under review, transportation continued to be the biggest cash cow for the group posting a pre-tax profit of Rs.3 billion for the year, up from Rs.2.3 billion a year earlier.

Leisure contributed Rs.2.5 billion, up from the previous year’s Rs.1 billion, financial services Rs.1.3 billion, up from Rs.868 million, property Rs.831 million, up from Rs.378 million, consumer foods and retail Rs.579 million, up from Rs.288 million and IT Rs.114.4 million, up from Rs.13.6 million a year earlier.

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