VALLIBEL ONE HAS GROWN INTO A DIVERSIFIED CONGLOMERATE
Vallibel One plc., the Dhammika Perera holding company with strategic investments in financial services, tile and sanitary ware manufacturing and leisure has grown into a highly diversified conglomerate, the company’s recently released annual report said.
Its sector-specific operations are carried out through several subsidiaries – Royal Ceramic Lanka plc., LB Finance plc, Delmege Ltd and Greener Water Ltd. Further, the company owns 22.2 % of Waskaduwa Beach Resorts plc, 18.02% of the Fortress Resorts plc and 14.95% of Sampath Bank plc treated as a strategic long-term investment.
The year ended March 31, 2015 had seen group turnover decline 10.5% to Rs.43.45 billion; but profit before tax was up 94.5 % to Rs.7.52 billion and the after tax profit up by 69.88% to Rs.5.2 billion. Profit attributable to equity holders of Vallibel One was up by 83.68% to Rs.8. 29 billion.
In his review in the company’s Annual Report, Perera has said that they have come to a point where the company has ‘robust visibility’ of future growth with group profitability enhanced during the year under review by an “impressive 69.88%.”
Perera said that this was “the visible impact of the many strategies that drive our corporate vision.”
The year under review had seen strong delivery across their core operational pillars despite many challenges they had to face. They had created strong brands with the diversity of their sectors truly being their strength.
Their brands had evolved to become world class as demonstrated by Rocell’s entry into the sophisticated Australian interior industry last year. With the launch of the brand in Melbourne, positioning it alongside other global and pan-regional top-end flooring and interior brands, they had entered a sophisticated market.
LB Finance had sustained its performance drive contributing over Rs. 2 billion to the group’s profitability. The Delmege Group, with a 165-year history in Sri Lanka acquired a few years ago, had shown signs of corporate recovery during the year under review. Delmege increased turnover 21% during the year to Rs.6.4 billion responding to various strategic maneuvers.
Perera said that they have obtained all approvals necessary to take forward the Greener Water project but had chosen to tread cautiously due to regulatory changes pertaining to tax exemptions and in view of the prevailing global and local economic as well as tourism trends.
He said that they would further evaluate the feasibility of this project this year if they deviate from the previously disclosed integrated resort concept, the company will seek shareholder approval before moving forward.
Vallibel One has added The Fortress Resorts plc as an associate company.
Claiming to be one of the most strategically diversified holding companies in the country, an operational review of the Group’s business said that LB Finance founded 44 years ago and listed on the Colombo Stock Exchange in 1998 has seen a series of ownership changes. The Company began to take off after 2003 and has posted “remarkable results” for 2014/15 with profits exceeding Rs. 2 billion – up 62.84%.
“Using a pragmatic comparison of pitching ourselves against the banking sector, we identified opportunities available and concentrated on the gaps prevalent,” the review said. “For example, potential was seen in the mortgage lending business of which we took the mantle, taking our customized mortgaged lending product to the underserved customer segments.”
They have diversified funding sources to reduce dependence on deposits which had led in turn to a favourable deposit mix.
Royal Ceramics’ Rocell and Rocell Bathware brands had trail-blazed pathways into tile and sanitary ware industry like no other, the review said. They had introduced new processes to reduce staining on polished tiles, an innovation developed in-house, adding value to the product manufacturing process.
Lanka Ceramics plc has become the leader in supplying essential raw materials to the local tile manufacturing sector. During the year under review they have supplied 42,617 MT from their various clay mining projects at Meetiyagoda, Dediyawala and Ovala to the ceramic sector Their mines provide them the leeway for future expansion.
Lanka Tiles plc has been exporting to highly competitive and discerning markets in Australia, New Zealand, USA, Japan, India, Maldives, Pakistan, Singapore, Canada and the UAE for over two decades. They plan to enter the North American and European markets next year.
They have seized the opportunities provided by the sharp decline in global oil prices in the latter half of the year under review enabling their gross profit margin to rise to 30% from the previous year’s 26%.
Waskaduwa Beach Resorts plc, their associate which is a subsidiary of Citrus Leisure plc, opened its doors in 2014 having being renamed Citrus Waskaduwa. This 150-room luxury resort at Waskaduwa occupying a land extent of 9.5 acres is the largest new hotel to be built in post-war Sri Lanka.
Vallibel One has paid an interim dividend of 40 cents per share for the year under review in 2014.
The company has a stated capital of Rs.27.16 billion, total assets of Rs.27.73 billion and total liabilities of Rs.20.9 million in its books.
Mr. Dhammika Perera with 63.48% is the controlling shareholder followed by the ETF (9.35%), Vallibel Investments (8.46%) and Vallibel Leisure (8.46%). The National Savings Bank and the ETF are among the top 20 shareholders.
The Directors of the Company are Messrs K.D.D. Perera (Chairman/MD), Nimal Perera (Executive Deputy Chairman), S.H. Amarasekera, J.A.S.S. Adihetty, Ms. K. Fernando and R.N. Asirwatham.