Bangkok--26 Feb--Master Mind Communications
After a sterling performance last year in which net profits jumped 521.36% to 589.94 million baht, SET-listed insurance-assets holding company Sri Ayudhya Capital PCL (AYUD) is targeting double digit increases in revenue and profitability this year on the back of a corporate strategy that emphasizes sustainable growth with quality.
“We’re not interested in growing quickly just for the sake of growth. We have a clear-cut policy to grow with quality and in a sustainable manner for the longer term,” stated AYUD’s President and CEO Rowan D’Arcy. "We prefer managing our growth through focused strategy, not only through short-term opportunities that may arise from time to time. This means we're much more selective in what and where we want to invest."
The “growth with quality and sustainability” strategy advocated by AYUD under Mr. D’Arcy’s leadership so far has paid off handsomely in terms of profitability. The company’s total revenues in 2013 topped 1,908.65 million baht, marking a 11.63% jump from the previous year while net profits skyrocketed 521.36% to 589.94 million baht over the same period.
In an official filing with the Stock Exchange of Thailand (SET) today (Feb 26, 2016), the company reported that its Board of Directors resolved during yesterday’s meeting (Feb 25, 2014) to pay an additional Baht 1.10 per share dividend from last year’s results, subject to the final approval by shareholders at the Annual General Meeting (AGM) in April.
Adding the interim dividend with the Baht .70 per share interim dividend that was paid out earlier, the total dividend of Baht 1.80 per share would amount to a dividend yield of roughly 7.70%, which is among the highest paid by SET-listed companies.
AYUD’s remarkable financial performance in 2013 has come as the result of significant improvement in all of the company’s core assets – namely its investments in wholly-owned subsidiary Sri Ayudhya General Insurance PCL (SAGI, a non-life insurer), a 20% stake in Allianz Ayudhya plus other non-insurance assets.
Mr. D’Arcy stated that the recovery in AYUD’s non-life business through SAGI gathered stronger momentum last year as actual claims from clients were lower than estimates. Alongside the rest of the general-insurance community here, SAGI suffered losses in 2011 due to heavy flooding in Thailand’s Central Plains provinces late that year which put AYUD’s net bottom line into the red.
But AYUD’s financial results turned positive in the following year (2012) as SAGI recovered from floods-inflicted damage and the recovery improved further last year. SAGI contributed about 25% of AYUD’s total profits last year.
The most significant contribution to AYUD’s bottom line, or accounting for over 50% of net profits, was derived from its investment in Allianz Ayudhya. “We made a strategic decision to raise our holdings in Allianz Ayudhya from 5% to 20% in 2012 and that investment has started to yield full returns last year,” Mr. D’Arcy explained.
The remaining roughly 20% of AYUD’s total profits was derived from its investments in other non-insurance assets which yielded targeted returns for our shareholders as well.
For 2014, Mr. D’Arcy has targeted a double-digit growth in both top-line revenues and bottom-line profits. In terms of total turnover, AYUD currently ranks 20th in Thailand’s general insurance sector. Asked whether AYUD is keen to climb the rank, Mr. D’Arcy stated: “We certainly would like to grow into the Top Ten. But to be honest, I would much prefer growing with quality rather than just quantity.”