CSE the wind beneath its wings
A small family hotel built on family property at a cost of Rs. 5 million that opened on Galle Road, Kollupitiya, in June 1972, has now grown to a business group which in the year ended March 31, 2011, posted a profit after tax of Rs. 935 million.
``It all began with Renuka Hotels Ltd., built on family-owned land, with my father, the late Mr. A.L. Thambiayah, as the Chairman and Managing Director. We now comprise seven companies, two of them – Cargo Boat Development and Renuka City Hotels – quoted on the Colombo Stock Exchange,’’ Mr. Ravi Thambiayah who currently heads the group and is its controlling shareholder said in an interview last week.
``I was the hotel’s first manager and put in 18 hours a day most days,’’ he said. ``It was very hard work but the effort paid off. That tradition continues. A member of the family tastes the food at the hotel every day. The job is mine on Sundays because nobody else wants to come!’’
The first Renuka Hotel, followed by Renuka City which belongs to a quoted company, was a family run hotel with members of the Thambiayah clan intimately involved in its operations. It attracted instant attention as it was highly service oriented with its Palmyrah Restaurant famous for decades for Sri Lankan cuisine and signature Jaffna dishes.
Paintings by Mrs. A.L. Thambiayah, the wife of the founder, hang today in many of the hotel rooms.
Expansion plans involving a new swimming pool and the addition of a few rooms have now been finalized within the same location.
While the core businesses have nearly always been profitably run, very shrewd investments made and managed by Ravi Thambiayah has made the lion’s share of group’s profits come off dividends and share trading.
``Hard work, yes,’’ says Thambiayah. ``But there was also a lot of luck.’’
Ravi Thambiayah is Chairman and his two daughters, Shibani and Arnila, are the Joint Managing Directors of the Group comprising Renuka Hotels Ltd., Renuka City Hotels PLC, Renuka Consultancies and Services Ltd., Cargo Boat Development Company PLC, Crescent Launderers and Dry Cleaners Pvt. Ltd., Lancaster Holdings Ltd. and Renuka Properties Ltd.
Alfred Thambiayah, who long represented the Kayts electorate in Parliament, was a legend in the Port of Colombo in yesteryear, building a thriving business around his Cargo Boat Despatch Company which participated in a variety of activities in the port.
``I have a very supportive board,’’ Thambiayah said. The parent company board has in addition to his wife and two daughters, business leaders like Messrs. Merril J. Fernando, Udaya Nanayakkara, Rajan Asirwatham and others.
In the last financial year ended March 31, 2011 group companies posted the following profits:
Renuka Hotels Ltd Rs.204,732,230
Renuka City Hotels PLC Rs.171,770,882
Renuka Consultants
& Services Ltd Rs.284,366,488
Cargo Boat
Development Co. PLC Rs.l60,956,529
Crescent Launderers
& Dry Cleaners Pvt Ltd. Rs. 43,102,887
Lancaster Holdings Ltd Rs.50,051,690
Renuka Properties Ltd Rs. 20,016,189
Renuka Hotels’ other income of Rs.191.6 million from outside its core hotel business included Rs.69.2 million in dividends and Rs.114.4 million in share trading profits.
Its listed share portfolio had cost Rs.806.2 million and carried a market value of nearly Rs.2.4 billion as at last balance sheet date.
Other group companies too performed spectacularly on their share trading and shareholding activities and very high dividends had been declared – Rs.50 per share from Renuka Hotels with a stated capital of Rs.6 million, Rs.400 per share from Renuka Consultants & Services with a stated capital of Rs.600,000, Rs.82.50 per share from Renuka Properties with a stated capital of Rs.600,000, Rs.18.10 per share on Crescent Launderers & Dry Cleaners with a stated capital of Rs.9 million and Rs.38 per share at Lancaster Holdings with a stated capital of Rs.600,000.
All these companies have substantial quoted share portfolios that have appreciated hugely and contributed solidly to their bottom lines.
source - www.island.lk
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