SECONDARY LISTING UNDER STRAIN

The LMD 100’s second board tells a tale of what’s been a demanding financial year

At the end of September, the Colombo Stock Exchange (CSE) comprised 284 companies – categorised as 20 Global Industry Classification Standard (GICS) industry groups – with a combined market capitalisation of Rs. 4,381 billion.

The annual edition of the LMD 100, also known as the ‘First Board,’ ranks the top 100 companies ranked on the basis of reported revenue. Additionally, the LMD 100’s ‘Second Board’ lists the next 50 companies based on the same criteria.

In financial year 2023/24, LOLC General Insurance leads the LMD 100 Second Board with an annual income of 9.6 billion rupees, registering a notable rise of 12 positions from its 2022/23 ranking.

The insurer reported a post-tax profit of Rs. 717 million, compared to the 1,399 million rupees profit after tax recorded in the previous financial year.

Ceylon Hospitals (Durdans) claims the second position on the LMD 100 Second Board, rising from 14th place in the 2022/23 financial year. The company reported a revenue of Rs. 9.1 billion (a substantial increase of 16%) while reporting a profit after tax of 454 million rupees, down from Rs. 652 million in the prior year.

Amana Takaful marked a remarkable ascent from 22nd position on the LMD 100 Second Board in 2022/23 to occupy third place in the latest annual rankings. The company achieved a noteworthy 28 percent increase in its top line – from 6.9 billion rupees in financial year 2022/23 – to Rs. 8.9 billion.

In fourth position is Senkadagala Finance, leapfrogging from 21st place in the preceding financial year. In 2023/24, the company reported a 22 percent spike in income with a net profit of 1.3 billion rupees (up from Rs. 478 million in the prior period).

Completing the top five of the LMD 100 Second Board is Merchant Bank of Sri Lanka & Finance with an impressive 15 percent increase in income. The company’s top line rose from 7.2 billion rupees in 2022/23 to Rs. 8.3 billion in the latest financial year.

Watawala Plantations is ranked sixth on the secondary listing, down from third place last year: the company’s revenue declined by five percent (from 8.7 billion rupees to Rs. 8.3 billion) in the 2023/24 financial year.

Sierra Cables ascended notably on the Second Board, climbing from 20th to seventh place. The company achieved a 15 percent increase in revenue along with an improved bottom line, reporting a profit after tax of 728 million rupees – up from Rs. 703 million in the previous year.

Meanwhile, Singer Finance (Lanka) claims eighth place with its revenue exceeding 8.1 billion rupees, marking a modest rise from Rs. 7.5 billion in the previous financial year. This reflects a seven percent hike in its top line.

Prime Lands Residencies, previously ranked 74th on the First Board in the 2022/23 financial year, dropped to the Second Board this year. The company reported a substantial 59 percent decline in revenue, which fell from 19.7 billion rupees to Rs. 8 billion this year.

Rounding up the top 10 in the secondary listing of LMD 100 entities is Talawakelle Tea Estates, climbing one notch from 11th on the Second Board. The company’s top line of 7.7 billion rupees represents a five percent fall from Rs. 8.1 billion in the previous financial year.

The cumulative income of the latest LMD 100 Second Board exceeds Rs. 319 billion, reflecting a two percent decline from the previous year’s 323 billion rupees.

In the 2023/24 financial year, cumulative post-tax profits fell by 59 percent, down from Rs. 32.8 billion to 13.3 billion rupees.

However, total assets saw a considerable appreciation of seven percent, rising from nearly Rs. 760 billion to 812 billion rupees. Additionally, shareholders’ funds grew by 13 percent, surpassing Rs. 335 billion during the period under review.

The 2023/24 LMD 100 Second Board welcomes nine new entrants – namely Sanasa Life Insurance, Eden Hotel Lanka, Palm Garden Hotels, Vidullanka, Lanka Ashok Leyland, The Kingsbury, Associated Motor Finance, Orient Finance and Trans Asia Hotels.

In the meantime, five entities have been displaced from the LMD 100 Second Board in 2023/24 – viz. Aitken Spence Plantation Managements, Regnis (Lanka), Kegalle Plantations, Udapussellawa Plantations and Madulsima Plantations.

The LMD 100 Second Board for financial year 2023/24 showcases strong representation from the food, beverage and tobacco sector, which includes 18 entities. Moreover, the diversified financial sector accounts for six representatives while the insurance sector has five.

Consumer services accounts for four while capital goods, consumer durables and apparel have three each. Healthcare equipment and services, real estate, materials, utilities, as well as household and personal products, have two representatives each. And retailing is represented by one entity on the Second Board.

FOOTNOTE Public companies incorporated under the Companies Act No. 7 of 2007 or any other statutory corporation – incorporated or established under the laws of Sri Lanka or any other state (subject to exchange control approval) – are eligible to seek a listing on the CSE to raise debt or equity. Companies desiring to be admitted to the official list of the exchange and secure a listing of their securities will be required to comply with the relevant provisions of the above act and the Securities & Exchange Commission Act No. 36 of 1987 (as amended) and Listing Rules of the Exchange.