It is relatively large spinning units whose various production installations are spread over three districts in the province of Punjab. The company is augmenting its production capacity and also dismantling outlived spindles. In additions to these initiatives the company is installing gas generators in the unit No. 4 at Sheikhupura. The company has achieved 16% growth in sales but it suffered 14.3% decline in the gross profit. However the gains in the sale of investment (shares) and intake of dividend income was of good amount which increased its profitability.
Additionally substantial savings in the financial cost also supported its profitability. On the other hand increase of Rs 21.49 million in the fair value of investment also supported to its profitability. The company posted pretax profit at Rs 58.6 million as against Rs 70.21 million in the preceding year. At the prevalent price of its share the PER works out to as multiple of 20.
Gulistan Textile Mills Ltd was incorporated in the province of Sindh on 2nd February, 1966 as a private limited company and later on after couple of months it was converted into public limited company. The company is listed on Karachi and Lahore Stock Exchanges. The registered office of the company is located at 2nd Floor, Finlay House, I.I. Chundrigar Road Karachi.
Its manufacturing facilities include 95,832 spindles and 709 rotors. The three manufacturing units of Gulistan Textile Mills Ltd are located in three districts of Punjab. Unit #1 is situated in Sama Satta Distt. Bahawalpur whereas Unit #2 is in Tibba Sultanpur Distt. Vehari. The third unit is located in District Sheikhupura at Ferozwatwan.
The annual production capacity of the plant has been recorded in terms of 20s count of yarn and has been rated at 30.72 million kgs (2002-03: 30.67 million kgs).
During the financial year 2003-04, its actual production in terms of all counts was recorded at 27.16 million kgs (2002-03: 27.46 million kgs). The company attained 98.8% utilised capacity as far as utilisation of capacity is concerned in terms of actual production converted into 20's count yarn. The slight shortfall in the capacity utilisation is because of technical reason i.e. stoppage of spindles rotors for routine maintenance. Hence the recorded average usage of spindles was lower at 92,521 spindles as compared to 95,832 spindles installed. The average number of rotors worked were 709 as against 768 rotors installed.
The company is also gearing up to address the challenges of post quota regime which offers opportunities as well as threats. One of the initiative is to expand the capacity by 10,800 spindles and the other is to dismantle the aging and outlived 4800 spindles. This will enable the company to improve quality as well as increase quantity and at the same time decrease cost per spindle.
While making great effort in reducing cost cannot live with the steep escalation in the electricity cost. Hence the company is importing gas generators for the unit #4 in Sheikhupura as the gas connection has already been sanctioned.
During FY 2003-04, the period under review, the company posted net sales revenue at Rs 3.539 billion (FY 2002-03: Rs 3.057 billion) showing 15.8% increase. Export sales accounted for the 41.9% of total sales.
However gross profit suffered decline despite modest increase in sales. Gross margin eroded by 2.86 percentage points from 11.04 percent in the preceding financial year to 8.18 percent in the year under review. The decline in gross profit was substantial, by 14.3% to Rs 289.35 million from 337.56 million in the previous year.
Miscellaneous revenue increased by Rs 12.51 million from Rs 5.52 million in the previous year to Rs 18.03 million during the year under review. The major intake in this account was from dividend income from associated undertaking and profit on sales of investment (shares).
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Performance Statistics (Million Rupees)
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30 September 2004 2003
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Share Capital Paid-up: 126.36 126.36
Reserves & Surplus: 790.33 768.97
Shareholders Equity: 916.69 895.33
L.T. Debts: 601.85 758.49
Deferred Liability: 103.95 83.93
Current Liabilities: 1,988.53 1,251.19
Fixed Assets: 1,287.97 1,360.73
Investment-Shares: 235.94 214.63
Investment Immovable Property: 61.98 61.21
L.T. Deposits: 16.50 33.38
Deferred Cost: - 0.90
Current Assets: 2,008.63 1,318.09
Total Assets: 3,611.02 2,988.94
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Sales, Profit & Pay Out
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Sales-Net: 3,539.18 3,056.81
Gross Profit: 289.35 337.56
Operating Profit: 222.84 279.19
Miscellaneous Revenue: 18.03 5.52
Financial (Expenses): 197.76 223.93
Adjustment of Fair Value of
Investment Property: 0.76 0.19
Increase in Fair
Value of Investments: 21.49 15.56
Profit Before Taxation: 58.56 70.21
Profit After Taxation: 38.33 48.06
(Dividend) @7.5% (2003: 10.00%): 9.48 (12.64)
Earnings Per Share (Rs): 1.69 2.34
Share Price (Rs) on 21-03-2005: 34.50 -
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Financial Ratios
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Price/Earning Ratio: 20.41 -
Book Value Per Share: 72.56 70.86
Price/Book Value Ratio: 0.48 -
Debt/Equity Ratio: 40:60 46:54
Current Ratio: 1.01 1.05
Asset Turnover Ratio: 0.98 1.02
Days Receivables; 55 45
Days Inventory: 123 79
Gross Profit Margin (%): 8.18 11.04
Net Profit Margin (%): 1.08 1.57
R.O.A. (%): 1.06 1.60
R.O.C.E (%): 2.36 2.76
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Plant Capacity & Production (Million Kgs)
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A) Yarn After Conversion into 20s Count
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Installed Capacity: 30.72 30.67
Actual Production: 30.34 29.90
Capacity Utilisation (%): 98.76 97.49
B) Total Number of
Spindles Installed: 95,832 95,832
Average Number of Spindles Worked: 92,521 91,042
C) Total Number of Rotors Installed: 768 768
Average Number of Rotors Worked: 709 551
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COMPANY INFORMATION: Chairman: Abdul Shakoor; Chief Executive: Naseer Ahmed; Director: Mohammad Abdullah; Chief Financial Officer: Ishfaq Saeed; Company Secretary: Zameer Q. Siddiqui; Registered Office: 2nd Floor, Finlay House I.I. Chundrigar Road Karachi; Web Address: www.gulistangroup.com.pk Factory: Unit #1 Sama Satta Distt. Bahawalpur; Unit #2 Tibba Sultanpur Distt. Vehari; Unit #3 Ferozwatwan Distt. Sheikhupura.
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