Access March quarter flat; full year net up 5% to Rs.2.47bn

2 June 2016 10:36 am - 0     - {{hitsCtrl.values.hits}}


Construction giant and diversified conglomerate, Access Engineering PLC (AEL) posted a net profit of Rs.642.2 million with an earnings per share of 64 cents, up just 1.5 percent for the quarter ended March 31, 2016 from a year ago due to the tax impact but the top line also narrowed, the interim results showed.

The share ended 50 cents or 2.20 percent up at Rs.23.20, at yesterday’s close. The tax expense for the period increased as much as 88.5 percent year-on-year (YoY) to Rs.123.1 million. The pre-tax profit was up just above 10 percent YoY to Rs.785.6 million.

The group top line narrowed by 2.4 percent YoY to Rs.4.56 billion as the group’s core construction business saw its revenue slowing down. The gross profit fell 6 percent YoY to Rs.956.5 million. Other incomes rose sharply to Rs.103.5 million from Rs.47.3 million a year ago. Overheads have been well contained but the net finance income slightly fell to Rs.7.76 million from Rs.8.94 million a year ago. The company this week bought a 50 percent stake of property developer Blue Star Constructions (Pvt.) Limited for a consideration of Rs.800 million.

The latter has been in business since 2007 and owns one acre of property in Rajagiriya. The company is planning a condominium at present. “Whilst this investment has synergies with the core business it will enable AEL to further strengthen its presence in the highly-growing and promising property development sector adding a complimentary segments to its operations,” Group Chairman Sumal Perera said in a filing to the stock exchange yesterday. Lately, the group has also been vying for opportunities both in its core business and elsewhere. The group forayed into the higher education sector last November with its 92 percent acquisition of Horizon Knowledge City Ltd for Rs.575 million. A month later, the group bought a 70 percent stake in Ninewells Hospital (Private) Limited, a specialized mother and baby care hospital in Narahenpita. The company borrowed Rs.5 billion through a debenture issue in November 2015. Meanwhile, for the year ended March 31, 2016, the group made an post-tax profit of Rs.2.47 billion or Rs.2.47 per share, up 5.1 percent. The top line rose by a modest 7.3 percent to Rs.17.7 billion and the gross profit rose by 3.9 percent to Rs.3.97 billion. The company said it maintained gross margins above 20 percent during the period. The group’s core construction segment increased its profits by 31 percent to Rs.1.7 billion on a revenue of Rs.2 billion, down 4 percent.

The group’s construction-related material production operation saw its profits narrowing by 13 percent to Rs.384.5 million. The segment recorded a revenue of Rs.1.58 billion, up 39 percent. Access Realties (Private) Limited halved its profits to Rs.152.7 million on a revenue of Rs.160.7 million from Rs.154.9 million. The group automobile arm, Sathosa Motors PLC increased its profit by 23 percent to Rs.332.8 million while the revenue rose by 16 percent to Rs.4.03 billion.

“The company declared a final dividend of Rs.0.50 per share on May 25, 2016 which is payable on June 14, 2016,” Access said in a statement. As of March 31, 2016, Access Group Chairman Sumal Perera held a 25 percent stake of the company while the statecontrolled private sector pension fund the Employees’ Provident Fund held a 2.74 percent stake being the seventh largest shareholder. Meanwhile, Norges Bank, the world’s biggest sovereign wealth fund, has accumulated shares up to 2.14 percent from 1.65 percent held in December 2015 and remains the eleventh largest shareholder.

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