Spence expands resort portfolio to reap peace dividends : Report

Aitken Spence, in a bid to reap the peace dividends, has expanded its resort portfolio, a TKS Securities Research report said.

“The former Neptune Hotel has re-commenced operations after an extensive repositioning process as Heritance Mahagedara, a 64-room up market wellness resort. Further, the Ramada Resort property in Kalutara is scheduled to be re-opened in second half 2012 as ‘The Sands’ following a re-positioning as a 4-star resort after which a further expansion in room capacity to 200 is planned," the report said. It said that Aitken Spence's hotel arm, Ahungalla Hotels has tied up with one of world’s renowned hotel chains “Six Senses Hotels and Spas” to build an up market hotel with 54 villas in Ahungalla at an investment of some US$ 40 million.

The report said that Spence’s Brown’s Beach Hotel, which is an associate company, is currently being demolished with plans afoot for a brand new 100-room luxury resort, the report added.

Heritance Kandalama, property of Spence, is also a cash cow and the report noted that further plans are also being drawn up to develop 100 acres of beach front property in eastern Nilaveli, with the aim of harnessing the tourism upbeat in the area. “Against this backdrop the company would enjoy strong and steady revenue streams from the leisure arm in coming years,” it added.

The report also said that during the last financial year there was significant growth witnessed in international trade and growing volumes handled in the port of Colombo. “This buoyant economic condition in Sri Lanka augurs well for Spence. Further given the emerging growth opportunities, the company has strategically increased its scale of facilities retaining its position as the largest Sri Lankan cargo and logistics provider,” the report said.

The group’s association with shipping firm Hapag Lloyd was uplifted to a joint venture during last year. "With the principal now becoming an investor to the company, a more mutually beneficial relationship can be expected in the future," the report said.

The investment of the group in Logilink”, a specialized facility that supports the requirements of the garment industry has begun to generate revenue and going forward, it will be a large focus in the sector.

Further the land of nine acres the company owns in Welisara is expected to be developed to extend its yard operations while another Rs 150 million would be invested in modern container handling equipment in this financial year.

The report also said that during the last financial year there was significant growth witnessed in international trade and growing volumes handled in the port of Colombo.