This textile unit of Muzaffargarh is one of the largest textile enterprises of the country. It is equipped with 65,280 spindles and 103 looms. Its subsidiary a power generation company, supplies power to its manufacturing facilities. Its financial backbone is robust which can be evidenced from its break-up value of the share.
The break-up value of the share at Rs 113.93 translates into more than 11 times of the par value of Rs 10. At present the share in the company is being quoted at Rs 66 per share which is more than 6 times of the par value.
During the last 52 weeks the market value of the share appreciated by 91.7% to Rs 80.50 from Rs 42 per share.
During the year under review, the company's sales reached Rs 3.172 billion despite difficult business environment in international as well as local markets.
However export sales made modest increase. But a change in market strategy led to deeper penetration in the local market which not only yielded quantum jump in sales but also drastically slashed the selling expenses.
The company posted net profit after taxation at Rs 192.99 million and the Board recommended cash dividend @40%.
Mahmood Textile Mills Ltd was incorporated in the province of Punjab on 25th February 1970 - thirty four years ago. It is a public limited company quoted on Karachi Stock Exchange. It is a textile composite unit of Muzaffargarh equipped with 65,280 spindles and 103 looms.
The registered office of the company is located at Mehar Manzil Lahori Gate Multan. It is principally engaged in the manufacture and sale of yarn and grey cloth.
Its manufacturing facilities are located at two places ie Mahmoodabad Multan Road Muzaffargarh and the other location at Masoodabad, D.G. Khan road Muzaffargarh.
The company owns 92.26% equity in its subsidiary company Mahmood Power Generation Ltd.
The subsidiary company's annual power generation has been rated at 80.592 million KWH.
During the year under review the subsidiary company attained 88% utilised capacity. The reason for shortfall in the utilised capacity was that the extent of power generation is limited to actual demand of electricity by its holding company Mahmood Textile Mills Ltd.
The subsidiary company has total asset base of Rs 219.29 million. During the year under review it generated net sales at Rs 254.90 million and earned net profit at Rs 15.09 million (FY 2001-02: Rs 4.83 million).
The investment portfolio of Mahmood Textile Mills Ltd also includes 20% holding in the shares of its associated undertaking Masood Spinning Mills Ltd also having 26.67% stake in the equity of its another associated company Roomi Fabrics Limited.
During the year under review, the company made additions in the fixed assets to the extent of Rs 62.54 million (2001-02: Rs 10.31 million) most of which was the capital outlay for plant and machinery (Rs 56.68 million).
The annual installed production capacity of the spinning unit has been rated at 22.170 million kgs of yarn of 20/s count.
During the year under review the unit spun various count of yarn. Actual production was converted into 20/s count of yarn and recorded at 24.183 million kgs (FY 2001-02: 23.654 million kgs).
Production of yarn increased by 2.23% and utilised capacity reached 109.08%. In case of weaving unit its annual production capacity has been rated at 19.975 million sq. meters of cloth of 60 picks.
During the year under review, the company had woven 20.902 million sq. meters of cloth converted into 60 picks. It attained 104.64% utilised capacity and registered 1.52% increase in output.
During the year under review the company generated net sales at Rs 3.173 billion as compared to Rs 3.037 billion posted in the previous year. Sales revenue marginally improved by 4.45% over the preceding year's.
The directors confronted different favourable and unfavourable challenges at local and international levels.
The 9/11 disastrous event followed by US/Iraq war and outbreak of Sars adversely effected the international market.
The strengthening of rupee against US dollars had restrictive impact on export proceeds.
However, management continued its efforts for export. Total exports sales improved to Rs 2.544 billion as against Rs 2.391 billion registering 6.4% growth.
In view of difficult business environment in the international market the directors changed their market strategy by deeper penetration in the local market.
Local sales made quantum jump by 77.3% to Rs 564.18 million from Rs 318.16 million recorded in the previous year.
The strategy not only achieved good results but also selling expenses were drastically reduced to Rs 89.98 million as compared to Rs 128.58 million booked in the previous year. A good profit of Rs 192.99 million was earned as compared to Rs 123.65 million recorded in the previous year.
The company is steadily following good payout policy for the shareholders. The Board of Directors recommended cash dividend at 40% as compared to 25% in the previous year.
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Performance Statistics (Million Rupees)
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30 September 2003 2002
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Share Capital-Paid-up: 99.74 99.74
Unappropriated Profit: 1,036.59 883.50
Shareholders Equity: 1,136.33 983.24
L.T. Debts: 68.05 143.12
Staff Retirement Benefits-Gratuity: 18.45 16.16
Current Liabilities: 248.20 250.30
Fixed Capital Expenditure: 727.89 729.18
L.T Investments: 146.81 106.81
L.T Deposits: 1.64 4.39
Current Assets: 594.69 552.44
Total Assets: 1,471.03 1,392.82
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Sales, Profit & Pay Out
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Sales-Net: 3,172.58 3,037.30
Gross Profit: 396.05 394.92
Operating Profit: 276.42 237.56
Other Income: 9.41 10.81
Financial (Charges): (50.07) (85.33)
(Depreciation): (79.75) (81.11)
Profit Before Taxation: 221.67 153.76
Profit After Taxation: 192.99 123.65
Dividend Cash @ 40% (2002:@ 25%): 39.90 24.93
Earnings Per Share (Rs): 19.35 12.40
Share Price (Rs) Dated 30.01.2004: 66.00 -
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Financial Ratios
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Price/Earning Ratio: 3.42 -
Book Value Per Share: 113.93 98.58
Price/Book Value Ratio: 0.58 -
Debt/Equity Ratio: 6:94 13:87
Current Ratio: 2.40 2.21
Asset Turn Over Ratio: 2.16 2.18
Days Receivables: 6 5
Days Inventory: 29 28
Gross Profit Margin (%): 12.48 13.00
Net Profit Margin (%): 6.08 4.07
R.O.A (%): 13.12 8.88
R.O.C.E (%): 15.78 10.82
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Plant Capacity & Production
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A) Yarn 20/s Count (Million Kgs)
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Installed Capacity: 22.170 22.170
Production 20/s Count: 24.183 23.654
Capacity Utilization (%): 109.08 106.69
B) Number of Spindles Installed: 65,280 65,280
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C) Cloth 60 Picks (Million Sq Meters)
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Installed Capacity: 19.975 19.975
Actual Production 60 Picks: 20.902 20.588
Utilized Capacity (%): 104.64 103.07
D) Number of Loans Installed: 103 103
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COMPANY INFORMATION: Chairman: Khawaja Muhammad Masood; Chief Executive: Khawaja Muhammad Iqbal; Director: Khawaja Muhammad Younus; Company Secretary: Ghulam Muhyuddin; Chief Financial Officer: Muhammad Amin Pal; Registered Office: Mehar Manzil, Lahori Gate Multan; Factory: Mahmoodabad, Multan Road, Muzuffargarh Masoodabad D.G. Khan Road Muzaffargarh.
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