Textured Jersey marks emphatic recovery with 72% growth in 2Q profits

[stocks hunterTop contributor]

Textured Jersey Lanka PLC (TJL) has reported a top line of Rs. 3.5 b and net profit of Rs. 282 m for the quarter ended 30 September 2014 (2Q FY2014/15).
According to TJL Chairman Bill Lam, this marked an emphatic recovery from the temporary setback suffered in the previous quarter, with sales up 29% and net profit up 72% on a quarter on quarter basis. Further, on a year on year basis the company was back on a strong growth trajectory with both sales and net profit up 7%.

Lam further stated that gross profit for 2Q FY2014/15 reduced by 2% year on year to Rs. 339 m, mainly due to lower margins arising from a combination of factors which included changes in product mix, outsourcing and higher dyes and chemical costs. However, the company managed to cut down its administrative and distribution expenses by 4% to Rs. 99 m, which resulted in the operating profit remaining at Rs. 249 m, on par with the corresponding quarter of last year.
TJL continued to maintain its near debt-free balance sheet as at 30 September 2014, with a strong cash position of Rs. 1.6 b, and only a temporary overdraft of Rs. 366 m. However, according to Lam, the cash balance was 21% less compared with the previous year, due to dividends and capital expenditure during the current quarter. As a result, net finance income for 2Q FY2014/15 was Rs. 16 m, 10% lower compared to last year.
Lower interest rates also contributed to this reduction in net finance income. The other operating income consisting of technical service fees of Rs. 21 m, allowed TJL to close the quarter at a net profit of Rs. 282 m, an improvement of 7% from last year.
Commenting on strategic initiatives, Lam highlighted that the construction phase of the multi fuel co-generation boiler plant was successfully completed during the quarter and test operations had been commenced. The plant will be fully operational in the coming quarters and is expected to generate substantial savings in energy costs. Similarly, the recently added 10-12% capacity will be fully utilised during the coming quarters with US demand coming back on track.
He concluded by stating that with strategic investments made in recent times coming into fruition, combined with a strong focus on innovation, quality and execution, the management is confident that TJL will be able to continue its growth trajectory and create shareholder value for the foreseeable future.

www.ft.lk

[Jana1Top contributor]

Sometimes I surprised whether these papers are paid under the table to write only impressive sentences in the headline. If we compare last year qtr to this year qtr it is just 7% up and six month 11% drop. Rather they compared last qtr with this qtr- this is  bullshit way to mkt one company. "Emphatic recovery"...

[First Guy]

Sometimes I surprised whether these papers are paid under the table to write only impressive sentences in the headline. If we compare last year qtr to this year qtr it is just 7% up and six month 11% drop. Rather they compared last qtr with this qtr- this is  bullshit way to mkt one company. "Emphatic recovery"...

No only the quarter, they also pick the line with the largest growth generally. If the bottom line is mediocre, they pick the Gross profit or Pre tax profit. If all are bad, just post the large revenue in absolute terms. Absolutely no value.

[slstockVeteran]

third class behaviour to hoodwink the pubic . Usually TJL management is rather decent and straight forward . wonder who hired this person to write such things to give twisted image .

Decent resporting is you highlight the truth , talk about any issues and address future prospects. Bad ones just try to highlight one things to cover up another.

No only the quarter, they also pick the line with the largest growth generally. If the bottom line is mediocre, they pick the Gross profit or Pre tax profit. If all are bad, just post the large revenue in absolute terms. Absolutely no value.

[yellow knifeTop contributor]

TJL is expected to maintain very good investor relationship. This headline really surprises a careful investor. Writers often hoodwink the general public. I never thought TJL will use writers to market the share. Unfortunately it seems to be happening.
This is why we are no more relying on News Papers but on social media and these websites where the writer immediately get the feed back...from general public.

[stocks hunterTop contributor]

One-off income ups TJL’s 2Q net by 7%; cuts dependence on national grid

The listed weft knit manufacturer, Textured Jersey Lanka PLC (TJL) posted a net profit of Rs. 281.79 million for the quarter ended September 30, 2014 (2Q15), up 7 percent a year ago, interim results showed.The earnings per share rose to 43 cents from 40 cents during the same period.The hike in TJL net profits came as a result of a one-off non-operating income of Rs. 20.59 million which comprised of a technical services fee.The top line grew by 7.12 percent Year-on-Year (YoY) to Rs.3.46 billion on the back of recovering United States (US) economy as the company sells mainly to US and Europe.

However, the gross profit margin contracted by 2 percent to 9.8 percent due to “a combination of factors which included changes in product mix, outsourcing and higher dyes and chemical costs,” Chairman Bill Lam stated in a statement.Net profit margin too slipped to 7.27 percent from 8.25 percent from a year ago. The company generated a return of 14.03 percent for its equity holders but the Colombo Stock Exchange (CSE) benchmark All Share Price Index (ASPI) returns through October was exceeding 20 percent.

However, the company’s future potential is high as its Price Earnings (PE) ratio stood at 14.66 – up from 9.56 times – while the CSE is trading at PE multiples of 19.73. As of end September TJL’s share was trading at Rs.19.90 while its net book value per share on the same day was Rs.9.67.
Hong Kong listed Pacific Textured Jersey Holdings Limited and Sri Lanka’s Brandix Lanka Limited jointly held 69.46 percent stake in TJL as of end September 2014.

The company contained its overheads during the quarter where both distribution and administrative expenses saw declines compared to the same quarter a year ago.TJL one of few listed companies which has a healthy cash balance plus a near zero gearing levels but there was a temporary bank overdraft amounting to Rs. 366 million end September.

The cash balance was Rs. 1.6 billion while the debt to equity ratio stood at 0.06.“However, the cash balance was 21 percent less compared with the previous year. The reduced cash position was owing to increased working capital, dividends and capital expenditure during the current quarter,” Lam stated.Further the finance incomes were down 7.8 percent YoY to Rs. 17.74 million as a result of lower interest rates prevailing.Lam also said that the company completed the construction phase of the multi fuel co-generation boiler plant which will reduce the dependence on the national grid for electricity at least by 1 megawatt.

“The plant will be fully operational in the coming quarters and is expected to generate substantial savings in energy costs,” he stated.
Lam further stated in his statement that the recently added 10-12 percent capacity will be fully utilized during the coming quarters with US demand coming back on track.

Meanwhile for the six months ended September 30,2014 TJL posted a net profit of Rs. 445.84 million, down 11 percent YoY on a revenue of Rs.6.13 billion.
This week Hayleys Group knitted fabric manufacturer, Hayleys MGT Knitting Mills PLC (MGT) announced a net profit of Rs. 31.74 million for the quarter ended September 30,2014 (2Q’15), up 44 percent from a year ago.

www.dailymirror.lk

[chutiputhaTop contributor]

TJL Report OUT..EPS 45% Increased
and Overall Good Move ahead

[nihal123Top contributor]

Thanks chuti

[smallvilleTop contributor]

This qtr also see an increase in non-operating income.

Overally good growth for the annum. 16% profit growth is commendable.
2015 March Qty compared to last year March qtr see a EPS growth of 45%. But Overall EPS growth YoY is 15.4% .

[කිත්සිරි ද සිල්වාTop contributor]

Thanks Small.
Not a bad counter for mid term.
Things will get better with GSP++ & other favourable conditions due to the political change in the country.
(I hold a sizeable portion of this counter in my pf).

This qtr also see an increase in non-operating income.
Overally good growth for the annum. 16% profit growth is commendable.
2015 March Qty compared to last year March qtr see a EPS growth of 45%. But Overall EPS growth YoY is 15.4% .

[BackstageTop contributor]

Textured Jersey braces for key acquisitions
By Duruthu Edirimuni Chandrasekera

Textured Jersey Lanka PLC (TJL) will soon be acquiring Ocean India Private Limited (OIPL) in India and Quenby Lanka Prints (Pvt) Ltd under the company’s expansion programme, a top official of the company said.

TJL’s independent valuation of OIPL in India and Quenby Lanka to further its acquisition plans is poised for completion in a few months time.

“We engaged E&Y to carry out these valuations and they will be done in a few months,” Hasitha Premaratne, Director TJL told the Business Times. He added that TJL is looking to inorganically expand via acquiring OIPL running mill in India (to facilitate immediate production) and is currently undertaking test orders before the integration. Analysts say that the company is poised for future growth considering its timely strategic initiative of commissioning a multi fuel boiler easing pressure on cost margin from 1QFY16E onwards and full effect of the near 12 per cent capacity addition which is expected to be materialized during this same forecast period.

Mr Premaratne added that as TJL has an energy intensive operation, the commissioning of the multi fuel boiler in its factory premises in Avissawella will secure a substantial cost savings during FY16E.

TJL expects to inorganically expand capacity via acquiring a running fabric mill as an initiative to become the leading solutions provider of weft knit fabric in the South Asian region, he said, adding that the company’s strategy is to undertake more profitable and research and development driven orders in line with the turkey model concept (R&D driven value added fabric orders).

“We want to expand from basic cottons to other materials and in terms of this, we want to bring in process innovations to fabrics that we manufacture,” Mr Premaratne said.

He added that the acquisition of Quenby is in line with this. “We want to set a bigger footing in terms of additional products in print fabric manufacturing,” he said.

According to him, the prospects of GSP-Plus concession in future would further augment TJL’s momentum where European customers account for nearly 65 per cent TJl’s revenue.

The company recorded its highest ever annual net profit of Rs. 1.3 billion for the year ended 31 March 2015, an increase of 16 per cent year-on-year. This result was achieved on the back of a Rs. 512 million net profit for the quarter ended 31 March 2015, representing a 46 per cent increase.
According to Mr. Bill Lam, Chairman of Textured Jersey, the strong quarterly performance enabled the company conclude the year with a record profit despite the slowdown in sales experienced in the early part of the year, attributed to unusual and extreme weather conditions in the United States.

[Future123Active Member]

For me TJL is one of the safest shares to hold at present political and economic condition. The depreciating rupee would give extra benefit to TJL.

They reported very good profit last quarter and expansion and acquisitions are underway. Foreigners are buying heavily. A dividend is due this month.

Can TJL touch 30/= next week.

[sashimaalTop contributor]

TJL Analysis :

https://drive.google.com/file/d/0BzrdWYYXdeiUSGtvSk9SOTZDV3J2a05WNlI4UVY2azRHRFZB/view?usp=sharing