Sri Lanka’s Hayleys Fabric Plc buys Rs. 4 billion textile firm from Ambeon
Sri Lanka’s Hayleys Fabric Plc has reportedly acquired the control of South Asia Textiles Ltd. (SAT) for Rs. 4 billion as part of expanding its business.
Hayleys has bought 98.84% stake of SAT comprising 97.68% from Ambeon Holdings Plc and 1.16% from a minority shareholder, according to local media reports.
“This acquisition supports Hayleys Fabric Plc’s strategic plan to expand capacity for higher value-added fabrics for exports by aligning with world-class Tier 1 brands under its portfolio of customers,” Hayleys Fabric has reportedly stated.
Post-announcement, Hayleys Fabric share had gained by 5% to close at Rs. 16.40 whilst Ambeon Holdings had improved by 3% to Rs. 22.
Formerly Hayleys MGT Knitting Mills, Hayleys Fabric in the first nine months of FY21 reported pre-tax profit of Rs. 583 million, up 25% from a year earlier. Revenue grew by 11% to Rs. 11 billion, the Daily FT has stated.
In the third quarter, top line growth was 24% to US$ 3.8 billion whilst pre-tax profit saw a massive jump of 262% to Rs. 235 million. In FY20 revenue was Rs. 12.2 billion and pre-tax profit was Rs. 304 million and after-tax profit was Rs. 231 million. Its assets were Rs. 10.8 billion as at 31 December 2020, the news report has further stated.
SAT in FY20 achieved a revenue of Rs. 9.1 billion, as compared with a previous Rs. 8.3 billion, reflecting a growth rate of approximately 10.17% Year-on-Year (YoY), while reporting a Profit After Tax (PAT) of Rs. 23.2 million. As at end FY20, SATS had Rs. 6.2 billion in assets and 1,116 employees.
In the first nine months of FY21, Ambeon’s textile business had Rs. 6.3 billion in turnover, down from Rs. 7.4 billion a year earlier and suffered a loss of Rs. 417 million as against a profit of Rs. 191 million. Its assets amounted to Rs. 4.8 billion, down from Rs. 6.7 billion, the report has added.
Established in 1993, Hayleys Fabric is a pioneer in weft knit fabric manufacture in Sri Lanka and is presently recognised as a world-class fabric manufacturer with a high degree of innovative capabilities with its own brand, INNO.
Also, Hayleys Fabric Plc, has the capability of delivering over three million metres of fabric per month. The product offering includes knitting, dyeing, printing, brushing, sueding and finishing.
The latest acquisition recorded by a local conglomerate is indicative of the strength and growth of Sri Lanka’s economy. The country’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery after facing the impact of the global Covid 19 pandemic. The many trade agreements as well as trade concessions enjoyed by the country have helped Sri Lanka’s manufacturing and exports sectors, especially the apparel exports sector. This sector has greatly benefited from the EU’s GSP Plus trade concessions. The apparel industry is one of the fastest growing economic sectors in the country. Sri Lankan authorities are also in the process of setting up a dedicated fabric manufacturing park to further boost the sector. Foreign businesses/investors could explore business/investment opportunities in Sri Lanka’s apparel manufacturing and exports sectors.
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