First of all, I would like to congratulate our heroic seven teams for winning the first ever Gold Medal for the nation. They have lifted Fiji to the top of the world as the Olympic champion.Secondly, I would like to congratulate the Board, Management and staff of the Group for the best operation result for Fijian Holdings Company this year. It has achieved beyond our expectation.
This year like the previous years; FHL has faced many challenges in the business environment. What has not changed however, is the unique ability of the Organisation to continue to adopt to an environment that remains volatile and challenging and respond in a manner that reflects our qualities and experience.
I hope that the report will provide an in-depth information on the operation of FHL and the Group companies. The Board has performed well in ensuring that the planned strategies were implemented to maximise shareholder returns. The Board together with the Management has stayed focused on the operation of the Organisation maintaining the values of the vision and the mission statement of the company in enhancing iTaukei involvement in business ventures.
All our Group companies are competitive and dynamic in their specialised field of operation and offer high end service to its customers keeping in mind the demand of quality service. The drastic effects of Cyclone Winston did not deter the group from regrouping and getting back to business to deliver what it does best. The Group also donated more than 100, 000 in cash and kind towards the relief efforts of the disaster as part of its social responsibility and being a good corporate citizen. With the recent developments and Governments focus on infrastructure improvement throughout Fiji has given the much needed multiplier effect to the economy as a whole and the FHL Group has benefited significantly on this mostly through the subsidiary companies; Basic Industries and Pacific Cement.
FHL has successfully completed another exciting year with remarkable performance reflecting the team work and dedication of the FHL family. Total Revenue for the Group was up by 14% compared to last year finishing at $298m. Net Profit After tax also increased as a result of increased sale, finishing the year at $23m compared to $17m in 2015. There was substantial growth of 61% in profit after tax for the holding company while the Group profits grew by 29%. The major contributors to the revenue were RB Patel, MFL, BIL, PCL and SSC. The larger margin contributors were RB Patel, FHLP, and BIL.
FHL Group and the holding company embraces a very strong financial position, recording total assets of $284m for the holding company while the Group recorded total assets of $475m compared to $459m in 2015. The equity holdings of the FHL Group continues to grow with increase of 7% compared to 2015 finishing at $218m. This is highly reflective of the positive performance of the subsidiary companies together with the performance of minor investment and associate companies.
The FHL Group consolidated net profit before tax at 30th June 2015 was $20.5 million, reflecting a 12% increase from the previous year. Consolidated revenue was recorded at $276 million reflecting a 9% growth compared to the previous year. The result of a growing economy was shown in strong performances from RB Patel Group, South Sea Cruises, and Basic Industries. They continue to be our biggest revenue contributors. Merchant Finance continued on its trend in being the highest pre-tax profit contributor to the Group. The increase in equity attributed to the shareholders by 9% continues to represent the solidarity of the investments made over the years and the many more to come in the near future.
The improved performance in the current year and the considerable achievement from the operation in previous years has seen FHL increase its dividend payout to shareholders from 21 cents in 2014 to 22 cents in 2015 and further increase by 1 cents finishing FY16 with 23 cents/share. The Board and the Management’s ultimate duty lies with the shareholders hence the results of the high operational efficiency and the increased margins has to be reflected in the dividend payout to the owners of the company.
FHL as a Group has paid approximately $24 million to Government in the form of taxes which equates to an estimate $15,000 per capita over a staff roll of 1,600. The competitive nature of FHL has been lucrative in the stock market evident by the ever increasing demand for its shares in the stock market. The price of FHL share at the time of this report was recorded at $4.08.
The introduction of the new Companies Act 2015 has put in more responsibilities on the Directors to be accountable to the shareholders at all times. The Act comes with heavy penalties and disclosure requirement of the Directors.
I am pleased to inform the shareholders that we have at all times acted in the best interest of the shareholders and I can proudly say that all Directors within the FHL Group have obtained formal training on the roles and responsibilities of directors and are members of internationally recognised Australian Institute of Company Directors.
Governance remains a high priority and the Board continuously engages in debate on how we can improve performance and effectiveness. While we have strengthened our process for evaluating the Boards as a whole, we also have feedback and support mechanism for each Directors aimed at improving individual performance.
We also advertise for Independent Directors during the year, recruited few more young directors to subsidiary boards. The company ensures that the directors a part of training organised by bodies like FIA, CPA and AICD to ensure that the directors are well informed on the latest developments for business opportunities as well as their responsibilities’. The company has obtained formal clearance and confirmation from SPSE that FHL as a listed company has fully complied with the listing rules of the institution.
REWARD FOR OLYMPIC GOLD MEDAL
As a good corporate citizen we had promised various rewards for Team Fiji participating at the 2016 Olympics games. The entire Fiji was thrilled to witness the historic occasion of Fiji winning the first gold medal. As we announced in June 2016, FHL will offer a cash reward of $2,500 and units worth $500 for each player of the Fiji Rugby Team. The winning of the gold medal will certainly affect our tourism industry for the betterment.
We are now entering the era of digitalization and there are now more emphasis on the effect of climate change in our environment. The effects of these two phenomena will certainly affect how our people behave and react. We have to put in place proper risk management policies and strategies that will ensure sustainability in our business ventures. These have to be reviewed annually because the world economy is changing rapidly.
We expect some of the challenges faced last year to continue into FY2017 as uncertainty continues to beleaguer the world economy. However, we are confident that the Group will be able to navigate the choppy waters and acquit itself. With a strong investment in diversified portfolio and our deep experience in the ever-changing business environment, the Group has significant strengths to withstand any turbulence ahead.
Whilst the macro environment is beyond our means to manage, we can however keep our house in order, rid ourselves of inefficiencies and consolidate our strengths to move forward.
FHL has prospective investment and strategic plans in place to ensure that the shareholder returns is maximised with every transaction we do. Few plans that are in the pipeline include investment in the Government Printer, Solar Energy, FEA whilst the strategically focused plans is to publically list MFL and BIL on the South Pacific Stock Exchange.
FY2017 will be another challenging year and with the efforts of our dynamic staff and Board Members of the Group, I believe that we can overcome any difficulties ahead and report a much stronger, healthier and sustainable performance in years to come.
I wish to thank particularly my fellow colleagues on the Board of FHL for their invaluable advice and counsel in the time they have been on the Board. Equally, my deep appreciation also goes to the staff and management who have pressed on with unflagging dedication and hard work.
To all our stakeholders and shareholders, we record our deep appreciation for their continued support all these years.
Since we always ask God through prayer at the beginning of all FHL Board meetings and all our Annual General Meetings, it is also proper that we thank God for the work being done for the past years.