Kitchen & Bedroom Group CEO Received PhD in Interior Design – The Island
Facing unprecedented challenges
- 39% revenue growth and 37% gross profit growth
- Highest PAT ever recorded for the 1st trimester
- Secures more than eight months of raw material as inventory for uninterrupted production
- Start of manufacturing operations in Bangladesh under wholly owned subsidiary, Asia Coatings (Pvt) Ltd
- Financial assistance plans provided to protect employees
Guided by its highly experienced and skilled corporate management team, JAT Holdings PLC achieved its highest revenue ever in the first quarter of the 2022/23 financial year. The group has also delivered outstanding performance, across a range of other financial performance indicators, defying industry trends, in a very challenging economic environment, a company press release said last week.
Overview of financial performance
First quarter total revenue increased by 39% to LKR 1.935 billion compared to LKR 1.396 billion in the corresponding quarter of the previous year, while gross profit in absolute terms increased by 37% to LKR 525.6 million, compared to LKR 382.6 million in the first quarter. of the 2021/22 financial year.
Gross profit margins were held unchanged at 27%, despite growing domestic and external challenges such as Sri Lanka’s multiple economic, energy and currency crises, compounded by a global shortage of raw materials, the company said.
At the same time, operating profit increased by 50% in the reporting period to LKR 280.2 million from LKR 186.75 million in the corresponding period. However, operating profit margin growth was moderate but still expanded to 14% from 13% previously, he added.
“This is due to various economic relief programs and facilities provided to employees, making it the largest ever wage increase within the company, coupled with rising inflation costs and the exchange rate volatility,” the statement said.
“Profit before tax (PBT) increased by 18%, showing sustained recovery momentum, to LKR 198.8m from LKR 168.9m previously, although margins contracted slightly to 12% in during the corresponding period to 10% during the period under review, due to the deterioration of the economic environment.
Discussing the Group’s strategic positioning and performance in the first quarter, CEO Nishal Ferdinando said: “Through our skillful and agile maneuvers, and leveraging the expertise and experience of our management team , we continued to deliver exceptional excellence to all of our stakeholders, including our customers, in the midst of the worst economic crisis that Sri Lanka, or us as an organization, has ever faced.
“Thanks to foresight and experience, we have anticipated the current crises, based on economic indicators and information from the field. Thus, we immediately mobilized our associates and supply chain partners to ensure adequate raw material stocks for at least eight months, which we were able to achieve thanks to our solid financial position, which was further consolidated at following our IPO.
In fact, the cash injection from our IPO has ensured low leverage, hence lower funding costs, helping us to remain relatively unburdened in a tightening monetary environment.
Just over a year ago, in July 2021, JAT Holdings launched its IPO, which saw the company successfully raise LKR 2.2 billion, in an oversubscribed issue, through the sale of 82.9 million ordinary shares at a price of LKR 27.00 per share. These funds have since been used for the establishment of an R&D center, the commissioning of a manufacturing plant in Bangladesh and channeled into market development initiatives for the group’s new flagship brand, WHITE by JAT. , according to the press release.
“We have also gone above and beyond, as an employer of choice, to ensure that our employees have adequate protection during the crisis,” added Mr. Ferdinando, “We have provided financial assistance programs , as well as relief in other forms such as flexible working, access to essential items, moral and emotional support and a general sense of job security.This has helped us to work better as a team and to continue to deliver what is expected of us, by customers and all other stakeholders.”
“The group’s export revenue decreased slightly in the first quarter, by 12%, due to the reorganization due to the start of operations of the group’s manufacturing plant in Bangladesh, owned and operated through its wholly owned subsidiary, Asia Coatings (Pvt) Ltd., the statement said.
“However, export revenues are expected to improve significantly as operations of the new facility ramp up. In addition, the Group has placed a strategic emphasis on developing its export operations, in order to consolidate its financial and operational situation for the rest of the year.
“Revenue from the Group’s operations in Sri Lanka increased significantly by 59% to LKR 1.576 billion in the first quarter of FY 2022/23 from LKR 989.3 million in the corresponding period. This is due to increased sales, coupled with the effects of input price inflation. »
Progress on IPO goals
A year after issuance, JAT Holdings PLC has delivered on its promises to investors regarding its IPO targets, the statement said. Commenting on the progress, Founder and Managing Director of JAT Holdings PLC, Aelian Gunawardene told investors that we have made excellent progress towards our IPO targets. The construction of our manufacturing plant in Bangladesh has been completed and the facility has been commissioned ahead of schedule.
“We look forward to reaping the benefits of the improved production capacity and capabilities of our new plant in the months ahead. Work has also already started on our R&D center, and we expect it to be completed within the next two months, again ahead of schedule and well under budget. We also used the funds from the IPO to add value and grow our flagship brand WHITE by JAT, and it paid off.