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| Operating highlights and significant events |
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June 2007
JKH subscribed to the 5:6 rights issue of its subsidiary, John Keells Hotels and increased its stake in the company to 92.8 per cent. The Rs. 2.90 billion raised was utilised to retire debt undertaken to fund its new hotel investments in the Maldives.
July 2007
The group implemented a “pay for performance” remuneration policy linking employee rewards directly to individual as well as organisational performance.
The group's first “Cinnamon” resort in the Maldives, “Cinnamon Island Alidhoo”, commenced operations from 1st July 2007.
August 2007
LMD ranked JKH as Sri Lanka's most respected entity for the third consecutive year.
October 2007
The two new bottling lines commissioned at Ceylon Cold Stores became fully operational and have more than doubled the beverage production capacity.
November 2007
JKH won the award for “Best Corporate Citizen 2007” presented by the Ceylon Chamber of Commerce.
December 2007
The group's associate, Union Assurance, won the Gold award for “Best Annual Report” by both the Institute of Chartered Accountants of Sri Lanka (ICASL) and the South Asian Federation of Accountants (SAFA).
The JKH Annual Report won the Gold Award for “Good Corporate Governance Disclosure” from both the ICASL and SAFA.
January 2008
The newly purchased resort hotels, in the islands of Ellaidhoo and Dhonveli in the Maldives, were fully refurbished during the year including the construction of 24 new water bungalows at Ellaidhoo and relaunched under the group's “Chaaya” brand as “Chaaya Reef Ellaidhoo” and “Chaaya Island Dhonveli”.
JKH announced and paid a special dividend of Rs. 2 per share amounting to approximately Rs. 1.3 billion, in consideration of significantly higher profits projected for the year ending 31st March 2008, because of higher dividend income, interest income arising from a high interest rate environment and various cost saving measures.
JKH invested Rs. 313 million in the 3:1 rights issue with warrants attached by its associate, Nations Trust Bank, and maintained its percentage stake in the banking associate. This capital was raised by the bank to fund its aggressive growth plans.
February 2008
The International Finance Corporation, a member of the World Bank group, signed a long term funding arrangement amounting to USD 75 million with JKH to support the group's expansion plans in key business areas in Sri Lanka and other countries in the region.
March 2008
The group's Retail sector expanded aggressively during the year with the launch of 11 new retail outlets under its “Keells Super” brand of super markets. The total number of outlets as at 31st March 2008 is 37 including 3 franchisee outlets.
The lease held by JKH on the Velidhu Island Resort in the Maldives expired.
JKH divested a majority stake in the systems integration business, Keells Business Systems.
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| Financial highlights |
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Group financial highlights |
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| Year ended 31 March |
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2008 |
2007 |
Chg. % |
2006 |
Earnings highlights and ratios
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| Group revenue |
Rs. million |
41,805 |
32,855 |
27% |
29,463 |
| Group profit before interest and tax |
Rs. million |
8,197 |
6,109 |
34% |
4,836 |
| Group profit before tax |
Rs. million |
6,579 |
4,795 |
37% |
4,310 |
| Group profit after tax |
Rs. million |
5,524 |
3,943 |
40% |
3,492 |
| Group profit attributable to shareholders |
Rs. million |
5,118 |
3,535 |
45% |
3,050 |
| Dividends |
Rs. million |
3,176 |
1,412 |
125% |
1,197 |
| Diluted earnings per share |
Rs. |
8.00 |
6.04 |
32% |
5.30 |
| Cash EPS |
Rs. |
9.54 |
7.50 |
27% |
6.69 |
| Interest cover |
No. of Times |
5.1 |
4.6 |
11% |
9.2 |
| Return on equity (ROE) |
% |
12.3 |
11.4 |
8% |
14.7 |
| Pre-tax return on capital employed (ROCE) |
% |
13.7 |
13.6 |
1% |
16.0 |
Balance sheet highlights and ratios |
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| Total assets |
Rs. million |
71,794 |
65,946 |
9% |
39,525 |
| Total debt |
Rs. million |
12,667 |
15,363 |
(18%) |
5,327 |
| Net debt / (cash) |
Rs. million |
20 |
(2,403) |
(101%) |
1,196 |
| Total shareholders' funds |
Rs. million |
44,218 |
39,235 |
13% |
22,801 |
| No. of shares in issue |
millions |
636 |
553 |
15% |
400 |
| Net assets per share |
Rs. |
69.1 |
67.1 |
3% |
39.7 |
| Debt / Equity |
% |
25.9 |
35.8 |
(28%) |
20.2 |
| Net debt / Equity * |
% |
0.0 |
(4.60) |
101% |
4.9 |
| Debt / Total assets |
% |
17.6 |
23.3 |
(24%) |
13.5 |
Market/shareholder information |
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| Market price of share as at 31 March (actual) |
Rs. |
119.75 |
155.00 |
(23%) |
157.75 |
| Market price of share as at 31 March (diluted) |
Rs. |
119.75 |
155.00 |
(23%) |
113.43 |
| Market capitalisation |
Rs. million |
76,160 |
97,945 |
(22%) |
63,101 |
| Enterprise value * |
Rs. million |
76,181 |
95,962 |
(21%) |
64,389 |
| Total shareholder return |
% |
(19.50) |
39.7 |
(149%) |
43.9 |
| Price earnings ratio (PER) (diluted) |
No. of Times |
15.0 |
25.6 |
(41%) |
21.4 |
| Dividend payout |
% |
81.0 |
62.8 |
29% |
65.7 |
| Dividend per share |
Rs. |
5.0 |
3.0 |
67% |
3.0 |
| Dividend yield |
% |
4.2 |
2.3 |
83% |
3.0 |
Other |
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| Total value added |
Rs. million |
16,227 |
12,800 |
27% |
11,236 |
| Employees |
Rs. million |
4,369 |
4,090 |
7% |
4,191 |
| Government |
Rs. million |
3,271 |
2,328 |
41% |
1,944 |
| Others |
Rs. million |
8,587 |
6,382 |
35% |
5,100 |
| Total employees (excluding associates) |
Number |
9,992 |
9,703 |
3% |
9,815 |
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| * Monarch and Emperor customer advances have been excluded. |
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Financial achievements and goals |
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| Indicator (%) |
Goal |
Achievement |
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FY08 |
FY07 |
FY06 |
| EBIT growth |
>20 |
34.2 |
26.3 |
36.0 |
| EPS growth (fully diluted) |
>20 |
32.4 |
13.9 |
33.2 |
| Cash EPS growth (fully diluted) |
>20 |
27.1 |
13.0 |
10.3 |
| Pre-tax return on capital employed (ROCE) |
18 |
13.7 |
13.6 |
16.0 |
| Return on equity (ROE) |
20 |
12.3 |
11.4 |
14.7 |
| Debt/equity |
100 |
25.9 |
35.8 |
20.2 |
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Industry group financial highlights |
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