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| Thursday, 14 October 2004 |
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Browns turns Rs. 155 m loss to Rs. 324 m net profit Brown and Company Limited recorded a Rs. 324 million net profit for the last financial year as compared with a net loss of Rs. 155 million in the previous year. The financial results of the company shows an operating surplus after a lapse of three years.
The company attributes restructuring programs lowering financial cost and marketing strategies as contributory factors for the growth in profit. Chairman of Brown and Company M.V. Theagarajah said that the Group recorded a turnover of Rs. 3.3 Billion for the year which is marginally less than the previous year. The Group recorded a Gross Profit of Rs. 765 Million as compared with Rs. 718 Million in the previous year, which is a year on year growth of 6.6%. The net profit was Rs. 324 Million as compared with a net loss of Rs. 1.55 Million in the previous year. "The enhanced other operating income - Rs. 77 Million, reduced Net Financing Costs - Rs. 143 Million and increased income from Associate companies - Rs. 219 Million, together with the profit contribution received from its subsidiaries resulted in the Group operating results being enhanced by Rs. 479 Million i.e. Rs. 324 Million Profit compared to a loss of Rs. 155 Million in the previous year. Theagarajah said, the restructuring of the business, which was referred to in his review last year is a continuous activity. The management buy-out that was referred to in last year's review has now been completed. We are now focusing on reductions in capital employed by the operational activities to reduce incidence of interest expenses and also offering Voluntary Retirement Schemes to staff who are surplus to our requirements to enhance the profitability of the operating units," he said. "We are endeavouring to meet customer expectations by investing time and effort to discover what customers want and then to provide the product or service at the best price. The long term focus is about building relationships with and loyalty to customers, meeting the demand in the best possible manner," he said. "One of our objectives is to reduce the finance cost by disposal of idle assets and using the proceeds to settle the loan. We also endeavour to optimise levels of Stocks and Debtors, thus reducing Working Capital and reducing the interest cost," he said. Managing Director of the company J.M.G. Candappa said the financial year just concluded was therefore, a successful one for the Company. During the year, we not only achieved a turnaround situation, we also have built a team of high calibre professionals to head the different Divisions. The next level of management was also strengthened. "I am confident that this team has the commitment and ability to take the Company to grater heights in the future. The Company has also the added advantage of having a large number of prestigious Agencies whose products have a high demand in the Sri Lankan market," Candappa said. "Certain strategic decisions were taken during the financial year. The sale of a 60% stake in the Motor Directorate business was completed. In addition, the Consumer Marketing and Commodity Trading Directorate was sold on a management buy-out. These two Directorates had been making losses for over the last five years. All the Divisions showed growth in turnover and gross profits. Special mention should be made of the Agricultural Directorate which recorded an exceptional performance. This performance was made possible due to the successful promotion of the Indian 4 Wheel Tractor in the Sri Lanka market. The Indian TAFE Tractor has now gained wide market acceptance and the future looks bright for this product. Battery, Office Automation, Hardware and Power Systems Divisions also fared exceptionally well during the first financial year," he said. "The Business Solutions Division fared extremely well. We have been successful in installing state-of-the-art Note Counting Machines at four leading Banks in Sri Lanka. These machines are fully computerised and have increased productivity in relation to Currency Sorting and Counting at these banks. Some of the Banks have given repeat orders. Lowering of financial costs was a major achievement. Lower interest rates also helped in this exercise. Working capital requirements also saw a reduction. We are carefully monitoring our current requirement to bringing it down further. Stricter credit control coupled with better inventory management methods have been put into place. These policies are being relentlessly pursued in the current financial year as well to further control the working capital requirements," he said. (S.P) |
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