Softlogic net surges 35 pct on ICT, retailing post-ODEL acquisition

Aug 20, 2015 (LBO) - Sri Lanka's Softlogic Holdings PLC, with diversified interests, reported a 35 percent rise in net profit to 304 million rupees for the three months to June, on revenues of 13 billion rupees, driven by stronger ICT and retailing activities. Earnings per share was 0.11 rupees for the quarter, up from 0.05 rupees. Full year earnings per share was 0.72 rupees in the year to March. The share last traded at 16.80 rupees. "Retail sector pulled in the reins to lead in Group turnover with a contribution of 33.4 percent post-ODEL consolidation," Ashok Pathirage, the chairman of Softlogic, said. Softlogic acquired more than 90 percent shares in the retailing company ODEL PLC after a 45 percent stake taken in September 2014 for 2.7 billion rupees. The retail sector contributed 33 percent to the topline with 4.4 billion rupees along with the consolidation of ODEL financials. Pathirage said the group had derived synergies through operational cost savings and better use of a sales platform with ODEL. "Our first major initiative for ODEL is the development of a megamall adjoining the flagship store at Alexandre Place." The mall with 400,000 square feet of space will retail Softlogic brands and rent out space to other retailers, cinemas and restaurants. Blocher Blocher Partners, an architecture and design firm from Germany, has been contracted for its development. Pathirage said the branded apparel division introduced ‘Pepe Jeans’ and 'Crocs.' Giordano and an International watch store had been opened at Liberty Plaza. For the ICT cluster, revenue more than doubled to 3.8 billion rupees with contributions from its Microsoft and Samsung products, while the group's interests in healthcare contributed 18 percent to revenues after registering a growth of 10 percent during the quarter. "We are progressing on the pre-construction schedule for Asiri Kandy Hospital. We target to commence construction in October 2015," he said. "Construction of the laboratory and administrative building and the facelift process of Asiri Hospital Holdings in Kirula Road would be completed by mid-2016," he added. The automobile sector recorded 296 million rupees in revenue with contributions from its 3S-Ford facility and its 'King Long' range of buses, while the leisure sector brought in 131 million rupees or one percent to the top line. In the leisure sector, Centara Ceysands Resorts & Spa had performed "better than most competitors new in the industry." The 24-storied Movenpick City Hotel is expected to open in April 2016. Commenting on future outlook, Pathirage said: "With the group’s growth being rapid and the acquisitions making good commercial sense at this point in time, the returns to group, due to strong synergy and depth, is likely to witness the multiplier effect in growth in the upcoming periods."