The Ceylon Guardian Investment Trust PLC and its listed subsidiary Ceylon Investments PLC reported net profits of Rs.1.68 billion and Rs.988 million respectively for the financial year ending March 31, 2010. In a press release, Ceylon Guardian stated that both figures represent a significant growth in profits from the previous year, as a result of increased portfolio profit booking in the wake of the superlative performance of the Colombo Stock Exchange during the financial year, as reported by the Investment Managers, Guardian Fund Management Limited.
Ceylon Guardian Chairman Israel Paulraj, commenting on the company's performance said investors are now switching their preference to the stock market given the declining interest rates and rising investor confidence due to the prevailing positive economic conditions. While booking profits, he added that the company has also strenghtened its portfolio with acquisitions in the banking, retail and tourism sectors, in line with the portfolio strategy formulated by the Investment Managers. Ceylon Guardian holds stakes in Aitken Spence, John Keells Holdings, Cargills, Commercial Bank, and Hatton National Bank which feature in the top holdings of the portfolio.
The press release stated that the Ceylon Guardian Group is managed by Guardian Fund Management Limited, an Investment Manager registered with the Securities and Exchange Commission of Sri Lanka. The Guardian portfolio is classified into short term and long term holdings to focus its investment decisions better. The long term portfolio is managed with a focus on future value creation to the shareholders while the short term portfolio aims to book regular profits taking advantage of market movements. The short term portfolio grew 117% to Rs.652 million for the year while the long term portfolio grew 187% to Rs.7.1 billion against a movement in the All Share Price Index of +127% for the financial year.
Private equity as a source of diversification and exceptional value addition to the portfolio has been a new area of investment that Guardian has gone into. Ceylon Guardian would evaluate stakes in such private equity projects, banking on experience drawn from the Carson Cumberbatch Group its parent company. The Fund Managers also plan to leverage its existing strengths in portfolio management and project financing skills to form strategic alliances to participate in financing activities in the local capital markets.