Access Engineering posts Rs. 2b pre-tax profits
Access Engineering Ltd, the first company which had an IPO in 2012
(March) has had a very successful year of operations in terms of the
financial results released for the ensuing year. Chairman/CEO of Access
Engineering, Sumal Perera, commenting on the financial performance for
the financial year 2011/2012, emphasized the fact that this was a
landmark year for the company with the main focus of building capacity.
“We are well geared to take advantage of the unprecedented growth
that is taking place in infrastructure development and the construction
industry. Some of the key highlights in capacity growth were increasing
the stated capital from Rs. 3 billion to Rs. 9 billion (this includes
the private placement of Rs. 4.5 billion and the IPO of Rs. 500
million). Also, we invested Rs. 1530 million in plant/ machinery and
increased our workforce from 1600 to 2700 employees. With this
expansion, we were able to achieve the best financial results in our
short history of 10 years.”
“The last financial year included three significant events. Namely,
the completion of the successful private placement, acquiring of Sathosa
Motors PLC and the listing of Access Engineering Ltd at the Colombo
Stock Exchange. This gears us well for future growth and to enhance the
group’s future business potential. Something significant that all our
stakeholders could take comfort is that, in an era where there is a
tendency of increasing interest rates, Access remains totally debt free
and has a healthy liquidity position with positive cash balances at both
company and group levels. Thereby the company is in a good position to
expand its existing business and to look at any attractive investment
opportunity that is available.”
He also added that any new business opportunity will always be looked
at from a sustainable and long term point of view.
Access Engineering, the leading value engineering solutions provider
in Sri Lanka, recorded an overall growth in all spheres of operations by
doubling its turnover to Rs. 7.31 billion during the financial year
Established in 2001, Access Engineering upto now, has risen
considerably by branching out to many successful business ventures and
partnerships with various local and multinational organizations. This
has enabled the company to enrich the lives of its employees and
stakeholders as well as make a significant contribution to the
socio-economic development of the country.
The fourth quarter turnover of Access Engineering was Rs. 2.79
billion with a comparative of Rs. 1.27 billion for the last financial
year. The company together with its two subsidiaries has exhibited
unprecedented progress in all performance indicators during this
financial year as illustrated below.
Gross profit for the financial year has increased to Rs. 2.11 billion
from last year’s Rs. 1.29 billion with a recorded increase of 63%.
Pre-tax earnings of the group stood at Rs. 2.03billion with a 47%
increase and after tax earnings attributable to equity of Rs.
1.73billion showcasing 80% growth from the previous year.
“The dedication of our workforce maintains the delivery of excellence
in their respective fields. They have put in a great deal of hard work
which has enabled Access to contribute immensely towards the country’s
economy and quality of living. While aspiring to become Sri Lanka’s
number one Value Engineering solutions provider, we have vastly invested
in the latest technology that will definitely enhance many of the
services we offer to our growing base of clients. These services include
Engineering, Design, Specialized construction, Quality Assurance and
much more.” said Mr.Rohana Fernando, Chief Operating Officer of Access
The company posted an EPS of Rs. 1.83 up by 52% from last year.
Similarly, the company’s Net Asset per share increased by 47% to Rs.
10.66. Access Engineering declared a dividend of 25 cents for the
financial year 2011/12 which amounted to a dividend payout of Rs. 250
The total asset base of the group stood at Rs. 14.2, billion compared
to the previous year asset base of Rs. 5.7 billion, mainly owing to the
new share issues (Private placement of Rs. 4.5 billon & IPO of Rs. 500
million) and fixed asset additions through the theme of capacity
building. The company invested heavily on new plant and machinery during
the year, targeting its strong order book ahead. The stated capital of
AEL is at Rs. 9 billion with a total equity base of Rs. 10.65 billion.
Access continued to maintain acceptable margins at company level from
its operations through its unique business model and cost reductions,
with a 28% GP margin and 21% NP margin for the financial year 2011/12,
with a group level GP and NP margin of 29% and 24% correspondingly. The
group accounted for a return on equity of 16% even after heavy
investments made in property, plant and equipment. By efficiently
managing the company’s working capital, the group was able to maintain a
current asset ratio as high as 2.5 times, a further improvement from its
previous year’s figure of 1.9.
The company is currently in possession of a very strong balance sheet
with almost zero debt. This negligible level of gearing is highlighted
with the company having an interest cover of 103 times and at group
level, an interest cover of 122 times. The resulting low financial risk
enables financing of future projects and implementing expansion plans
very viable while the above data once again reiterates on its
During the financial year 2011/12, Access Engineering carried out
many engineering and construction projects with a host of locally and
internationally acclaimed business partners.
Among them are the construction and improvement to the Batticaloa –
Trincomalee (A15) road project, the Jaffna - Kankesanthurai- Palali road
project, the Kantale – Trincomalee (A6) road project, the
Galagedara-Rambukkana road project, the Mannar – Nawakkuli (A32) road
project,the Batticaloa water tower project and the Ambalanthota Salinity
During the financial year 2011/12, Access successfully completed two
share issues which offered 200 million new shares. The private placement
that was held in June 2011, raised Rs. 4.5 billon and attracted many
local and foreign high net worth individuals as well as corporate
The company was listed on the Colombo Stock Exchange in March 2012
through its IPO of Rs. 500 million which was oversubscribed during the
opening day. The successful completion of the share issue as well as the
positive sentiments and perceptions, bares testament to the trust
investors have in the company and its future prospects. Adding to its
strong employee philosophy, the three founding directors of the company
gifted shares worth Rs. 3 billion to each and every employee thus
creating a new era of employee recognition and rewards among employers
in Sri Lanka.
The subsidiaries of Access Engineering, namely Access Realties Ltd
and Sathosa Motors PLC have also improved their performance during the
financial year 2011/12. Access Realties Ltd which is the managing
company of Access Towers at Union Place, Colombo 2, secured a net profit
of Rs. 111 million for the financial year 2011/12. Sathosa Motors PLC,
the strategic acquisition made by Access in February 2012, has posted a
net profit of Rs. 176 million for the year.