Cargills (Ceylon) PLC, running the country’s biggest supermarket chain, has posted a record turnover of Rs.12 billion, up 22.8% from the previous year, and a group profit after-tax of Rs.444.8 million, up from Rs.262 million a year earlier.

The company’s new Chairman, Mr. L.R. Page, said in the just released annual report that Cargills had performed "exceedingly well" during the year with a profit attributable to shareholders growing an impressive 70.9% from the previous year to Rs.447.8 million.

The Food City chain was now entering its 25th year of operations having evolved from four department stores in 1982 with 300 employees and an annual turnover of US$ 600,000 to be the fastest growing and largest retail chain in the country with 116 outlets in 19 districts, Page reported.

"As economies evolve the shift from un-organized to organized trade is a national phenomena and this shift contributes substantially to economic growth in terms of taxes and employment," he explained.

"Cargills Food City has developed an innovative business model to create sustainable value chains for smallholder farmers and entrepreneurs who otherwise would have no direct access to the market."

He said that they had taken super-marketing to the masses giving average Lankans the opportunity to enjoy a wider range of high quality products at affordable prices.

Expressing their conviction that this sector has potential for exponential growth in the medium and long term, Page said the company would continue to invest in the retail sector with the same momentum maintained over the past five years.

He also reported that Cargills Food City had become the second most valuable brand in the country this year improving on its brand finance index ranking of the previous year when they were placed third.

Cargills Meats had re-launched its processed meat range under the `Supremo’ brand last December offering improved quality, new packaging and brand support, the chairman said.

This company was equipped with anti-bacterial, cold rooms, cold storage and manufacturing areas and their meat manufacturing plant was one of the most technologically advanced facilities in the region.

Cargills Magic ice cream was the preferred dairy ice cream in Sri Lanka and has been an innovative trailblazer in the industry. Page said that in the medium term they expected their brand (now No.2 in frozen confectionary behind Elephant House) to become the top ice cream brand in the country in the medium term.

The year under review had seen the group investing Rs.696 million in property, plant and equipment and a similar investment was anticipated for the current financial year.

Cargills...

A final dividend of 20 cents per share on top of an interim of Rs.7.50 per share will be proposed at the forthcoming AGM, Page said. They were ploughing back profits into the business and had confidence that such investment will yield good returns to shareholders in the future.

"The upward movement in the company’s share price is a reflection of investor confidence in your company and its businesses," he said.

He also said they were mindful that the ever escalating prices of almost all inputs could make a dent in profitability and have adopted stringent cost control measures to overcome any adverse impact.

"Coupled with other business strategies such as gaining a larger market share etc., we are confident that the group will have a promising future," he declared.

Page also announced the retirement of Mr. Anthony Page as Chairman of the company on March 24 after a long and faithful period of service when he made an invaluable contribution to the company. His predecessor who became chairman of Cargills in 1998 had been involved in every aspect of the company’s management since 1981 providing exemplary leadership. Anthony Page will continue to serve on the Cargills board.

Cargills has a stated capital of Rs.130.7 million, reserves of Rs.662.4 million and accumulated profits of Rs.748.5 million in its books with borrowings running at Rs.532.7 million.

The Cargills share had a market value of Rs.1,990.75 as at March 31, 2008, up from Rs.450 a year earlier with the share trading at a high of Rs.2,100 and a low of Rs.500 during the year. The share has been split and made more liquid this year.

Ceylon Theatres with 69.98% is the biggest shareholder of the company followed by Mr. V.R. Page (5.88%), Sri Lanka Insurance Corporation Life Fund (4.09%) and Mr. Anthony Page (2.99%).

Millers PLC, a subsidiary of Ceylon Theatres, was previously the holding company of Cargills with 61.81%. This company was amalgamated with Ceylon Theatres last March as a result of which Ceylon Theatres became the holding company.

The directors of the company are: Messrs. L.R. Page (Chairman), V.R. Page (Deputy Chairman/MD), S.V. Kodikara, P.S. Mathavan, Jayantha Dhanapala (w.e.f. 01.06.08), A.T.P. Edirisinghe, S.E.C. Gardiner, Sunil Mendis, Anthony A. Page, J.C. Page, E.A.D. Perera and Mrs. S.R. Thambiayah.