CSD.N0000 (Seylan Developments PLC)

[yellow knifeTop contributor]

Companies become Cash-Cows either when they reach maturity or when their growth potential is subject to glass ceilings.

Many subsidiaries of Banks who are not related to Finance field are not encouraged to grow by its regulator. The reason is very clear. Regulator cannot control areas which are not belonging to Financial intermediary.

This is a property related company where 70.51% belongs to Seylan Bank.

IN the backdrop of the restrictions on the activities of the company given applicable regulations fo the Central Bank of Sri Lanka..... (Chairman's Message)

Such companies give away a good portion of its Earnings back as Dividends.

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[yellow knifeTop contributor]

Revenue is mostly based on rental income. Fair values of the property were the reasons behind sudden ups of PAT over revenue. (in 2016 changes in fair values of investment properties was 262 Million)

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[yellow knifeTop contributor]

Net Assets of properties often lies above market price.


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[yellow knifeTop contributor]

Annual Report 2022

CSD is a good company to be included in Dividend Hunters in their Portfolios.

These property related companies belonging to Banks and Finance Companies can perform with less number of employees and maintain a very high dividend payout ratio. The same reason makes its Net Assets to grow slowly and thus the capital appreciation expectations are also low in these kind of shares. 

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[yellow knifeTop contributor]

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[yellow knifeTop contributor]

The company often declare its dividend on 23rd February every year since the company is a December company. 

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[yellow knifeTop contributor]

Companies where dividend payout ratio is high its net assets value does not grow fast. Hence the share price does not appreciate much over the period of time. PLC, CSD, VPEL are some examples of these kind of companies. 

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[yellow knifeTop contributor]

The nature of some companies are such the operations can be managed with less number of staff. 

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[yellow knifeTop contributor]

Other factors worth mentioning are 
1. Income tax increased from 24% to 30% and it affects PAT
2. Rentals on apartments are fixed in USD hence the massive Rupee Depreciation of last year helped to generate unexpected gains.
3. 100% occupancy of East Tower and 75% in West Tower recorded.
4. Moratuwa Property will be disposed after CEA ( Central Environmental Authority) approvals are in place.
5. Ja-Ela  property will be auctioned once the legal procedures are over. 

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10.1 Finance income	2022	2021
Interest income on loans	496,815	332,155
Interest income on bank deposits	5,789,941	2,654,639
Interest income on debentures	24,575,000	24,573,289
Interest Income on treasury bills	30,922,733	3,170,806
Gain on change in fair value of financial assets at fair value through profit or loss	0	1,200,041
Net Foreign Exchange Gain	12,094,631	336,565
	73,879,120	32,267,495