Textured Jersey Lanka PLC (TJL) reported a 68% year-on-year bottom line growth for the quarter ended 30th September 2013 (2Q FY2013/14), continuing on its impressive performance. The company reported a net profit of Rs. 263mn for 2Q FY2013/14, and a cumulative net profit of Rs. 504mn for the period ended 30th September 2013/14 (1H FY2013/14), up 53% year-on-year, positioning the company for another phenomenal year. In a statement released to the CSE on the quarterly results, Mr. Bill Lam, Chairman of Textured Jersey stated that during the quarter under review the company had initiated investments to expand capacity, while adding to its product offering capability as well. Further, Mr.Lam stated that in order to facilitate its long term growth plans, steps have been taken to further strengthen the company's senior management team.
In his statement, Mr. Lam mentioned that due to higher sales volumes as compared to the previous year, TJL was able to record sales of Rs. 3.2bn for 2Q FY2013/14, 34% higher than that of last year; placing the 1H FY2013/14 cumulative sales figure at Rs.6.1bn, up 21% year-on-year.
On this strong top line growth, TJL was able to achieve a gross profit of Rs. 347mn for 2Q FY2013/14, up 79% year-on-year, and cumulative gross profit of Rs. 694mn for 1H FY2013/14. In his statement, Mr. Lam attributed this to higher margins achieved particularly through operating at optimal capacity levels with a good product mix.
As per the results released, distribution expenses for the quarter under review increased 54% year-on-year to Rs. 22mn, and administrative expenses increased 91% to Rs. 81mn. Mr. Lam pointed out that the year-on-year increase in administrative expenses was a result of a lower expense figure being recorded in the corresponding period last year due to a provision reversal.
However, due to a strong year-on-year gross profit growth, TJL recorded an operating profit of Rs. 249mn for 2Q FY2013/14, up 67% year-on-year placing the cumulative operating profit at Rs. 478mn for 1H FY2013/14, up 52% compared to that of the previous year.
Mr. Lam also commented,"Consequent to maintaining a near debt-free balance sheet and a healthy cash position throughout the period, TJL was able to record Rs. 18mn in net finance income for 2Q FY2013/14, representing a substantial 156% growth year-on-year."As per the results released, as at 30th September 2013 the company had no borrowings and a strong cash position of Rs. 2bn.
Mr. Bill Lam continued to mention in his statement that as a result of the impressive performance during the quarter and the strong balance sheet, TJL was able to achieve its final result of Rs. 263mn net profit for 2Q FY2013/14, growing 68% year-on-year. Mr. Lam stated that the order book for the next six months remains strong and the company is poised to report a steady profit growth in the second half of the financial year as well.However, he pointed out that the growth in the next half may not be as significant as the first on a year-on-year basis, due to the exceptional performance during the latter half of the previous year.
Talking about the customers, Mr. Lam mentioned, "TJL's focus on providing customer driven solutions through flawless execution while maintaining industry-leading quality standards have helped build strong relationships over the years with strategic customers such as Intimissimi, Victoria's Secret, Marks & Spencer, Decathlon and DBA brands. Further, TJL continues to develop growing interest from emerging brands as well."
He also mentioned, "The European business has shown significant growth during the past year led by Intimissimi, Decathlon and DBA brands, which was mainly driven through product and service innovation. This is clearly evident by the company's healthy order book to date."
In conclusion, Mr. Lam stated that given all the factors mentioned in his statement, the management remains confident of sustaining growth and delivering value to shareholders on a continual basis.