Food & Personal Care-Product: GILLETTE PAKISTAN LIMITED - For the First Quarter Ended March 31 2004

The company is a subsidiary of The Gillette Company USA. Gillette Pakistan Limited was incorporated on December 1986 as a public limited company having its registered office situated at Imperial Court Building 2nd Floor, Dr Ziauddin Ahmed Road, Karachi.
It is listed on Karachi and Lahore stock exchanges. The closing market price of its share on 5-07-2004, was recorded at Rs 60 per share which is 6 times of the par value. During the last one year the price of the share appreciated at Rs 78.50 from Rs 45.60 per share.
The company is primarily engaged in marketing and selling of blades and razors, personal care products, alkaline batteries, household appliances and oral care products including manufacturing of toothbrushes through contract.
The size of its balance sheet on 31st March 2004, expanded by Rs 62.06 millions to Rs 444.72 millions from Rs 382.66 millions on 31 December 2003.
The financial backbone of the company remained robust as evidenced from solvency, profitability and liquidity ratios.
The balance sheet is relatively awash with cash while inventory slightly reduced. But trade debts enlarged substantially. Although net sales were on the lower side.
During the first Quarter (Q1 2004), the company posted sales in terms of value at Rs 179.60 millions as against previous Q1 2003 sales at Rs 187.47 millions exhibiting 4.2% decline. While reviewing the sales trend of prior years it can be seen that the company had also experienced downward trend last year.
One would have hoped that in the very first quarter of the current year, sales trend should have moved upward to give a direction of growth in business for the whole year.
The only reason for this outcome as given by the directors is that key promotional activities have been scheduled in the second quarter comparing to the first quarter in the year 2003.
But during the period the company launched sales of its product Mach3 Turbo, the advanced shaving system which received overwhelming response as reported by the company. This gives sufficient insight to project that this launch will increase the company's market share in the blades and razors business segment.
Despite lower sales, operating profit of the company increased mainly because of sharp reduction in the administrative and selling expenses because of lesser advertising and sales promotional activities and strict monitoring of administrative expenses.
So at the bottom line earnings per share did improve by 2 paisas which should be considered as benchmark for higher growth in the profitability.

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Performance Statistics                (Million Rupees)

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Balance Sheet                                  -As At-

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                                 March 31  December 31

                                     2004         2003

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Share Capital-Paid-up:             192.00       192.00

Unappropriated Profit:              78.67        46.47

Shareholders Equity:               270.67       238.47

Deferred Tax Liability:              1.30         1.32

Current Liabilities:               172.75       142.87

Tangible Fixed Assets:              19.66        21.08

L.T Loans:                           1.30         1.72

L.T Deposits:                        0.60         0.60

Current Assets:                    423.16       359.26

Total Assets:                      444.72       382.66

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Profit & Loss A/c For the

 First Quarter Ended        March 31 2004         2003

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Sales-Net:                         179.00       187.47

Gross Profit:                       71.51        73.23

Operating Profit:                   38.69        34.51

Other Income:                        1.44         4.22

Financial (Charges):                (0.04)      (0.04)

Profit Before Taxation:             40.09        38.69

Profit After Taxation:              32.20        31.84

Earnings Per Share (Rs):             1.68         1.66

Share Price (Rs) on 05.07.2004:     60.00            -

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Financial Ratios

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Price/Earning Ratio:                35.71            -

Book Value of Share (Rs):           14.10        12.42

Debt/Equity Ratio:                  0:100        0:100

Current Ratio:                       2.45         2.51

Gross Profit Margin (%):            39.82        39.06

Net Profit Margin (%):              17.93        16.98

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