June 02, 2011 (LBO) - Sri Lanka's Softlogic group which is raising 4.0 billion rupees through an initial public offering will double its retail store network to push its consumer electronic and handset sales, an official said.
Softlogic wants to increase its stores by 175 to 200.
"Currently we are spending on average about two million rupees per store," Softlogic group chairman Ashok Pathirage told reporters.
"So even if we build 250 stores it would cost us about 500 million (rupees) and we will be funding it through internally generated funds."
About 25 percent of the group's 16 billion rupees revenue comes from the Nokia agency. The group also has interests in healthcare, automobile, information technology and it is entering leisure. It also has agencies for Dell and Samsung.
In 2010 the firm's handset sales doubled from the previous year to 775,000. Pathirage says he expects to sell a million Nokia handsets in 2011.
"Nokia will do about five billion rupees this year on handset sales," Pathirage said. "The previous financial year we only sold 375,000 (handsets) so there was a 100 percent growth on the handset businesses."
Nokia sales mostly cater to consumers in the bottom of pyramid, which rakes in about a 15 percent margin on sales.
Softlogic' growth comes despite Chinese handsets making inroads into the market.
Globally, Nokia has been hit in the high end smart phone market due to delays in shipping new models and a changeover to Microsoft software. Nokia issued a profit warning on lower than expected sales this year and its stock price slumped this week.
Softlogic is offering 139 million shares at 29 rupees each to raise four billion rupees mainly to repay debt taken to buy into hospitals. The group now control the listed Asiri Hospitals.
It is also building a city hotel which will be managed by Movenpick.
The issue opens for subscription on June 09.
For sull story - http://www.lbr.lk/
source - www.lbo.lk
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