Textile Spinning: PREMIUM TEXTILE MILLS LIMITED - Half Year Ended March 31, 2004

Premium Textiles Mills Ltd started its operation in 1987 with 12,480 spindles and served the local markets in the initial years. It is now annually producing 6.790 million kgs of yarn converted into 20/1 count with 20,164 spindles. The company is marketing its products in both domestic and the national markets.
Another expansion plan is in place for setting up a new unit to cater to the rising demand of melange yarn. Total sales of the company increased from previous half year figure at Rs 329.7 million to Rs 405.8 million during the half year under review. 6 months in sales works out to 23%. The directors explained that the increase may be attributed to increase in the selling price from Rs 5,233/- per bag to Rs 6,375/- per bag.
However, there was pressure on gross margin as the GP margin reduced to 9.27% from 11.50% in the same period last year.
This shows the impact of increase in the raw material prices. Resultantly, in spite of substantial increase in sales, the gross profit remained constant around the figure of Rs 37 million. Further pressure was exerted by the rise in selling and distribution expenses.
It is natural that with the rise in sales, these expenses would also rise. Inevitably, operating profit was lower by Rs 3.21 million.
The decline in financial expenses by Rs 2.9 million neutralised the impact of rise in the operating expenses and pretax profit almost equalised the figure of the corresponding period of last year. Since tax provision was lower so the net profit after taxation was higher by one third.

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Performance Statistics                (Million Rupees)

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Balance Sheet                                  -As At-

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                                 March 31 September 30

                                     2004         2003

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Share Capital-Paid-up:              61.63        61.63

Unappropriated Profit:              74.32        66.59

Shareholders Equity:               135.95       128.22

Surplus on Revaluation

 of Fixed Assets:                   26.80        28.21

L T Debts:                         109.90        60.70

Deferred Liabilities:               50.92        49.72

Current Liabilities:               700.72       443.57

Tangible Fixed Assets:             338.62       302.31

L T Deposits:                        2.52         2.51

Current Assets:                    683.15       405.60

Total Assets:                    1,024.29       710.42

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Profit & Loss A/C For

 The Half Year Ended        March 31 2004         2003

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Sales-Net:                         405.88       329.79

Gross Profit:                       37.62        37.95

Operating Profit:                   22.30        25.51

Other Income:                        0.34         0.16

Financial (Charges):               (13.74)       16.64

Profit Before Taxation:              8.47         9.02

Profit After Taxation:               6.31         4.71

Earning Per Share (Rs):              1.02         0.76

Share Price (Rs) on 15-09-04:       22.00            -

Price/Earning Ratio:                21.57            -

Book Value of Share (Rs):           22.06        20.80

Debt/Equity Ratio:                  40:60        28.72

Current Ratio:                       0.97         0.91

Gross Profit Margin (%):             9.27        11.50

Net Profit Margin (%):               1.55         1.43

R.O.A (%):                           0.62         0.66

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