Brown & Company operates as an Investment Holding Company, along with operations of its own. The Company’s various business segments, referred to as Strategic Business Units (SBUs), are classified in three (3) broad clusters, i.e., (i) Automotive & Hardware, (ii) Agriculture and Heavy Equipment, and (iii) Pharma, Consumer, and Integrated Engineering Solutions. During FY25, the Company’s clusters exhibited mixed performance. Despite economic stability, the Company recorded a standalone net loss (excluding share of profit of equity accounted investees) of LKR~1.9 bn in FY25, an improvement compared to a larger loss of LKR~4.2 bn in FY24. While this reduction in losses reflects some progress, the Company’s performance remains constrained, as evidenced by a net loss of approximately LKR~10.7 bn during 1HFY26. Going forward, the Company plans to fortify its market share and presence in the Tractors and Batteries segments to improve its overall performance. At the Group level, despite a revival in economic activity, the investments yielded subdued results during FY25. Barring the Trading Segment (net profit of LKR~5bn), other segments remained under pressure and registered bottom-line losses, with the Investments’ segment losses being the most significant. Overall, the Group reported a net profit of LKR~29bn during FY25 (LKR~-8.5bn in FY24), primarily owing to the acquisition Gain on Bargain Purchase (LKR~65bn) of Plantation segment subsidiaries. This turned into a loss during 1HFY26. In terms of financial position, the Group’s funding needs were primarily met through borrowings from the parent entity (LOLC Holdings) and Financial Institutions. As of June 2025, Brown & Co’s loans from related parties increased to LKR~34.6bn, up from LKR~25.6bn in June 2024. Meanwhile, the Group’s 'due to related parties', primarily from LOLC Holdings, climbed to LKR~173bn in FY25 (FY24: LKR~127bn). A substantial portion of these payables relates to “Browns Investments PLC,” the key investment arm of the Browns Group.
The Company’s debt coverage ratios remain under stress due to weak operating cash profits, recording at just ~0.3x in FY25 (~0.1x in FY24), and ~0.3x in 1QFY26. This comes off despite a moderate debt leverage ratio of ~37.9% in FY25 (FY24: ~37.9%), and ~23.8% in 1QFY26. Meanwhile, the Group’s debt leverage ratio was recorded at ~16.1% in FY25 (~17.4% in FY24), and ~26.6% in 1QFY26.
The Debt Instrument Rating reflects the unconditional and irrevocable Corporate Guarantee provided by LOLC Holdings PLC in favor of the Trustee for the benefit of the Debenture Holders, guaranteeing both interest and principal payments for up to two Interest Periods. LOLC Group, a leading financial services company, has a diverse portfolio of investments in ~25 countries. LOLC Holdings had a consolidated asset base of LKR~2,132bn as at 1HFY26 and earned a profit after tax of LKR~12.2bn for 1HFY26. The rating depends on the LOLC Holdings rating as well as continued support from them. Any change in the rating of LOLC Holdings will impact the rating of the Debenture.