Tuesday, September 20, 2011

Commercial Credit to increase shareholder value by 957% in next 3 years

Commercial Credit launched its strategic growth plan which seeks to increase its shareholder value by 957 percent over the next three years.

Launched on 12 September at the Ceylon Continental Hotel under the theme ‘Winning Strategies – A new era of excellence and Teamwork’, the three year Strategic Plan focuses on increasing the company’s stellar performance to new and unprecedented heights as it pursues its goal of becoming the number one finance company in the country, the company said in a statement issued on Monday, September 19.

The Strategic Plan aims to extend the company’s current track record of success, demonstrated by a 1,457% increase in pre-tax profits for the year ending 2011, compared to the previous year ended March 2010.  The company also saw a staggering rise in profits from Rs. 15.9 million for the first quarter of 2010 (April – June) to Rs. 192.9 million for the corresponding quarter of 2011.  Meanwhile, profits for the first half of the year ending September 30 are estimated to increase still further.

Following a change of management at the company in September 2009, Commercial Credit has gone from strength to strength, climbing out of relative obscurity to redefine the financial services industry landscape in the country as it achieved unparalleled growth and stability to claim a well-earned place among the top finance institutions in the country. Since then the company has relentlessly pushed boundaries and broken barriers to achieve countless successes with its own unique brand of leadership and focused strategic direction.

Visionary leadership and pioneering corporate strategies have proven their merit, propelling Commerical Credit’s phenomenal growth.  Since late 2009, the Company’s growth has more than tripled in every sector, with the Income and Interest Expenditure Gap –the core income and performance indicator of a finance company – growing a staggering  1,100% from Rs. 10 million to Rs. 120 million per month.

Speaking at the event, the company’s CEO Roshan Egodage pointed out that other indicators of the company’s healthy performance include a Fixed Deposit base which has grown from Rs. 840 million to a staggering Rs. 4.5 billion within just two years, an equally impressive growth in the asset base from Rs. 688 million to Rs. 5.3 billion and an investment increase from Rs. 50 million to Rs. 800 million per month.In addition a notable decrease in Cost to Income ratio from 73% to 45% has further aided the bottom line.  The company’s current NPL rate stands at just 3%, well below the industry average of 9.22%.

The company also enjoys the highest ROE in the industry as well as achieving the highest profit increase in the finance industry – no mean feat considering the number of established players already in the market.

Further backing the Company’s solid track record is an exponential increase in the customer base, which has grown from 162,000 to 310,000 in a short span of time.

DGM Strategic Planning, Andrew Samuel, who along with the rest of the leadership team has played a key role in the company’s fortunes since the change of management in late 2009, pointed out that this growth has been aided by the reputation of stability and trust Commercial Credit now symbolises.  A vigorous expansion programme which has seen its reach expand island-wide with the establishment of several new branches at prominent locations has also increased the company’s public perception.

This expansion is also in keeping with the company’s dedication to offer its customers increasing services and benefits.  In keeping with this expansion and an increasing demand for its services, the Company’s product portfolio has also expanded rapidly, and today include motor credit, micro finance, lease vehicle,CCL cash, land finance, lease machinery, short term loan, motor plus, consumer credit and pawning. 

With the combined force of these exponential changes, Commercial Credit’s listing on the Colombo Stock Exchange mid this year created waves among investors, attracting much attention and enabling the company to achieve the 4th highest market capitalisation among the finance companies in the country, with the number of shareholders increasing over five fold.

Not prepared to sit on its laurels however, the company has now embarked on a strategic plan aimed at further boosting growth and profitability. Formulated with the expertise of renowned regional strategy consultancy MTI Consulting, the plan focuses on further raising the bar in terms of achieving record growth and success in the next three years.  MTI’s internationally acclaimed 8S Strategic Plan focuses on key operational aspects of an organisation and is a proven success with numerous worldwide applications.  

With MTI’s vast experience in the business of strategy consulting, the company’s CEO Hilmy Cader was nevertheless impressed by Commercial Credit’s level of efficiency and dedication as it pursues greater success.  "We’ve been very impressed by the level of passion that the management team has, as well as the sincere company-wide keenness to growing the business. This has helped Commercial Credit achieve its tremendous growth, enabled MTI to work with the teams to develop solid strategic initiatives and will certainly serve to boost its expected growth in the upcoming years’, remarked Hilmy Cader at the launch.

With a proven track record of unequalled successes behind it and a strong plan for the future, the Company’s leadership is confident of achieving the ambitious goals it has set itself for the future.

Chief among these are an exponential increase in the Company’s share price, which it aims to boost from a current market price of Rs. 30 to Rs. 287 in just three years, as well as a staggering increase in market capitalisation from Rs. 6564 Mn to Rs. 37,500 Mn within the three year period encompassed by the Strategic Plan.  

While the numbers may seem ambitious, industry veteran Egodage is confident that they can be achieved.  ‘We have attained unparalleled success since embarking on a new chapter of growth in 2009.  The success we plan to achieve in the next three years is an extension of this achievement and the fulfilment of the trust in our capabilities placed in us by our shareholders and customers’, he added.

source - www.island.lk

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