|Downsizing costs Elephant House a pretty penny
Ceylon Cold Stores Limited (CCS), a member of the John Keells Holdings group, had boosted revenue 13% during the 9 months ended December 31, 2001 but seen a sharp downturn in profitability on account of the Rs. 90 million cost of a voluntary resignation scheme (VRS), figures now with shareholders reveal.
The VRS which has been accepted by 327 employees will cost the company approximately Rs. 150 million, CCS said. The Rs. 90 million in the provisional represents what has already been paid.
The company is already on record saying that while the initial outlay is high, a leaner and tighter operation will reflect favourably of profitability down the road.
At company level, revenue was up 14% to Rs. 1.1 billion from Rs. 0.9 billion a year earlier. At group level, a 13% revenue growth to Rs. 1.8 billion was achieved.
Popularly known as Elephant House, the company which is the leading soft drinks and ice cream manufacturer and marketer in Sri Lanka, posted an operational profit of Rs. 147.1 million at company level during the period under revenue, up 8% from a year earlier. Group profit was better with the operating profit up 10% to Rs. 181.1 million.
The voluntary resignation scheme had cost the company Rs. 90.2 million during the period under review, while the groups expense on this account was Rs. 92.7 million.
The tax charge had gone down both at group and company level on account of lower earnings. The companys tax obligations at Rs. 20.8 million for the period was down 36% from a year earlier, while the group tax charge was down 17% to Rs. 38.7 million.
The attributable group profit for the 9 months under review was Rs. 44.3 million, down 62% from a year earlier while at company level, the Rs. 30.7 million attributable was down 70% from a year earlier.
The CCS group had Rs. 125.5 million available for appropriation as at December 31, 2001, with an earning of Rs. 2.05 per eight-rupee share. This compared with a Rs. 5.37 earning per share a year earlier.
CCS which has an issued capital of Rs. 173 million and a share premium of Rs. 97.2 million in its books saw its share traded at a high of Rs. 67 and a low of Rs. 35 during the period under review. This compared with a trading range of Rs. 64 to Rs. 40.25 a year earlier.
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