Hela Apparel Group’s revenue surges by 36.5% YOY to Rs. 23.4 Bn

Hela Apparel Holdings PLC has announced a significant improvement in its financial performance during the quarter ended 30th September, with a return to operating profit for the first time in eight quarters.

The Hela Group’s revenue surged by 36.5% year-on-year to Rs. 23.4 billion in the second quarter of FY 2024/25. This was primarily driven by the contribution of the recently established Brand Licensing Division, following the acquisition of UK-based Focus Brands in January 2024.

Sales for the existing Private Label Manufacturing Division were also supported by the ongoing recovery in demand from its key brand partners across the US and Europe.

Profitability for the Group demonstrated a significant improvement during the quarter, with gross profit increasing by 222.9% year-on-year to Rs. 4.5 billion. Notably, the manufacturing division recorded a gross profit margin of 16.6% in the second quarter, which is the highest level in 14 quarters.

As a result, the Hela Group recorded an operating profit of Rs. 557 million in the second quarter. This is the first recurring operating profit reported by the Group since the second quarter of FY 2022/23 and marks a turnaround in its financial performance.

Chairman of  Hela Apparel Holdings PLC A. R. Rasiah said, “I’m pleased with our improved performance during the second quarter, which reflects the positive impact of the strategic steps we’ve taken to reposition the Hela Group for growth and profitability. As we continue to work towards further improvement over the coming quarters, I would like to take this opportunity to thank our teams across the globe for their hard work in delivering this favourable result”.

Hela recently confirmed the successful over subscription of its rights issue, which was completed immediately following the end of the quarter, to raise approximately Rs 1.6 billion.

Group CEO of Hela Apparel Holdings PLC Dilanka Jinadasa added, “We intend to build on the second quarter results to ensure a sustainable return to net profit over the coming quarters. Driving efficiencies across the wider group, whilst leveraging the synergies between the manufacturing and brand licensing divisions, will remain the key focus.”

“Our recent exclusive partnership with Reebok to design, manufactures, and sell their outerwear products across the UK and Europe, is a great example of this and how we are expanding our service offering across the global fashion value chain”.