Printcare records good performance with cautious future outlook

Printcare Group posted a turnover of Rs. 1,715 million for the six months ending September 30, 2008, recording a growth of 33% over the same period last year. Most of the growth has come from new products launched within the last two years to cater to the growing telecom and apparel industries. Products that cater to the tea industry have also shown reasonable growth.

Profit before interest and tax has improved to Rs. 211 million in the six month period ending September 30, 2008, from Rs. 149 million during the same period last year- a growth of 42%. Profit before tax has increased to Rs. 93 million in the six month period from Rs. 54 million in the same period last year, an increase of 72%.

The growth in turnover and profit has been primarily due to several initiatives taken by the Group over the last two years, to identify and enter more profitable segments, increase product quality and customer service, improve productivity and reduce costs. The Group also successfully secured lucrative one-time promotional orders during the first half of the year, which also helped add to the profit growth.

Profitability
While the growth in Printcare’s profitability has been impressive over the first half of the year, the conditions prevalent in the world markets and recession in some of Printcare’s key overseas markets, will impact profit growth in the second half of the year and in the 2009-10 financial year. The Group is aggressively taking steps to further improve its cost structure and strengthen its liquidity position in anticipation of what is feared to be one of the worst global recessions in recent history. There are clear indications that all segments will experience a decrease in demand, with the tea segment suffering the steepest decline.

Largest
The Printcare Group is arguably one of the world’s largest suppliers of customised tea bag tags and envelopes for the tea bag industry. In addition to the tea industry, Printcare is also a major supplier to the Telecom, food, beverages and apparel industries.

Printcare was recently adjudged a “Business Superbrand” in recognition of its long standing customer relationships, which have been built on quality and a deep understanding of individual customer needs. Printcare also received a Presidential Export Award for 2006-2007 and was adjudged the best Printing Company in the country, and Sri Lanka’s most technologically savvy company by the National Chamber of Commerce.