The past few years saw Hayleys aggressively expanding its portfolio through acquisitions.

Our focus during the year under review was on consolidation to generate a strong and sustainable return on the investments made.

Strategic Context

Rapid Expansion
The past few years saw Hayleys aggressively expanding its portfolio through acquisitions. Notably our entry into the manufacture of aluminium extrusions to exploit opportunities in the construction industry, and our strategic expansion in the leisure industry through the five star city property, The Kingsbury and the resort chain Amaya Leisure.

Our entry into wind power through the 10 MW wind farm in Kalpitiya has paved way for solid returns that will augment our existing renewable energy portfolio based on hydropower and biomass.

We also invested further in the Plantations sector, increasing our holdings in Talawakelle Tea Estates and in our tea export arm, Mabroc Teas.

Furthermore, overseas manufacturing operations in Thailand and Indonesia in the Purification sector were strengthened by capacity enhancement.

Consolidation

As discussed in our last Annual Report 2012/13, the focus during the year under review was on consolidation to generate a strong and sustainable return on the investments made.

The debt portfolio of Hayleys PLC underwent structural changes through a successful Rs. 2 bn debenture issue to raise medium term funds. In addition, Hayleys PLC tapped overseas markets and obtained a US$ 10 mn debt facility from Standard Chartered Bank, UK, along with The Kingsbury PLC obtaining a US$ 10 mn loan from a German financial institution, DEG.

In March 2014, Alumex PLC - the flagship company in our Construction Materials sector became the 11th company in the Hayleys Group to be listed in the Colombo Stock Exchange.

Group Strategies

At Portfolio Level
  • Redeploy or liquidate underperforming assets of the Group
  • Develop existing, profitable businesses both horizontally and vertically
  • Invest in new businesses and restructure existing ones based on their strategic fit with the portfolio

Across the Portfolio
  • Enhance value addition and move up the value chain
  • Continually improve products and services
  • Maintain high and consistent quality in all what we do
  • Implement lean manufacturing, process efficiency and waste minimisation
  • Manage our environmental performance by reducing our GHG emissions intensity and improving energy efficiency
  • Focus on developing people and leaders
  • Expand our global presence

Group Goals

Time horizon Parameter Indicator Target
Short-term Profitability ROCE
(excluding real estate)		 >20%
EBITDA/assets >10%
Liquidity Operating cash flow/PAT >100%
Current ratio 1.5 to 2.0x
Debt/EBITDA <3.0
Long-term Growth Growth in domestic revenue (>inflation) >6%
Growth in export revenue (>Sri Lanka rupee depreciation) >4%
Growth in capital >18%
Stability External credit rating ≥AA
Gearing 35 to 40%