Softlogic on consolidation mode
The Softlogic Group’s many pies will be ready to eat in the medium term with the group on a strong consolidation drive this year. Under construction Asiri Kandy hospital would be completed by 2018. Its insurance arm, Asian Alliance Insurance signed a Share Sale and Purchase Agreement (SSPA) to dispose of its General Insurance business to Fairfax Group in June which the Business Times reported earlier this year. “This would help Asian Alliance Insurance PLC to focus on its thriving life insurance business,” Ashok Pathirage, Softlogic Group Chairman has said in his first quarter financial results of FY2016/17 which he says showed mixed fortunes.
Movenpick, the Sri Lanka unit of the global hotel chain, will be operational by January 2017. This would be the country’s first five-star hotel in three decades, Mr. Pathirage has said. He has noted that floods and landslides that affected Sri Lanka in May, had taken its toll on some parts of the economy dampening the business sentiment further. “The introduction of VAT to the healthcare sector resulted in such services being viewed by the public as too expensive to bear, which adversely affected the quarter results of this sector.
Nonetheless, Group revenue increased a strong 13.3 per cent to Rs. 14.8 billion for the quarter.” Softlogic Group turnover was primarily dominated by its fully owned sectors Retail (32.1 per cent) and ICT (30.6 per cent), he has said adding that Financial Services improved its contribution to group revenue to 17.2 per cent whilst Healthcare Services sustained its turnover contribution at 16.4 per cent. “Automobiles continued with a marginal contribution as plans are underway to improve the sector performance in the periods to come.
Here the Gross Profit registered a marginal improvement of 4.2 per cent to Rs. 4.5 billion during the first three months of the financial year. Despite increasing business activities, operational cost margins were optimised at 24 per cent during the period with operational expenses increasing 14.5 per cent to Rs. 3.5 billion,” he has said adding that distribution costs increased 30.3 per cent to Rs. 853 million whilst administrative costs registered an increase of 10.2 per cent to Rs. 2.7 billion during the quarter.