Pharmaceutical: RECKITT BENCKISER PAKISTAN LIMITED - First Quarter Ended March 31 2004

Until the year 2002, the Reckit Benckiser was the Reckitt & Colman of Pakistan Ltd. The company is a public limited company incorporated in the province of Sindh having its registered office and head office situated at 11th floor, State Life Building No II Abdullah Haroon Road Karachi.
Its principal business is manufacturing and marketing of consumer household and pharmaceutical products.
It was listed at Karachi Stock Exchange in 1977. On 12th October 2004, the closing price of its share was quoted at Rs 108 which is nearly eleven times of the par value of Rs 10.
Last month in September 2004, the price of share ranged between Rs 106.40 and Rs 119.90 per share which has remained the highest price during the last one year.
Last year in 2003 the company did not declare dividend but in 2002 the company announced cash dividend at an attractive rate of 25%.
It has been analysed in the Q1 2004 Report of the company that the annual compound growth in the first quarter 2002 comes to 12.7% which is more representative of the real trend after adjusting for market conditions and other factors.
The Q1 2004 sales of Rs 742.13 million registered 23.69% increase over sales of Rs 600.01 million posted in the SPLY which is an impressive growth.
But the directors foresee that the compound growth rate of 12.7% is more indicative of likely trend.
During Q1 2004, the company's gross margin substantially improved from 38.83% in Q1 2003 to Rs 43.23%. Hence the gross profit increase rate was even higher by 132.76% compared to growth rate of sales in the period under review. Profit before taxation moved up by 110.06% to Rs 82.45 million from Rs 39.25 million posted in the same period last year.
The company has robust financial backbone as there is no long term debt and liquidity position is much more comfortable.
The cash position of the company improved significantly due to continuous focus on minimizing the level of net working capital.
As a result, cash and bank balances increased to Rs 1.113 billion (December 31 2004: Rs 0.965 million). In the business segment of Household products the Q1 2004 sales reached Rs 44.3 million showing an increase of 39% over the SPLY and Export Sales showed good growth.
The company made increase investment in its brands. The business segment of pharmaceutical products were 6.3% higher. But operating profit increase was much higher by 76.7%.

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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:             320.59       320.59

Reserves & Profit:                 457.76       404.81

Shareholders Equity:               778.35       725.40

Deferred Liability-Staff Gratuity:  75.53        70.57

Current Liabilities:             1,021.54       854.35

Fixed Assets:                      170.82       175.26

Deferred Taxation:                  79.40        75.88

L.T Loans & Advances:                6.29         6.27

L.T. Deposits:                       0.06         0.06

Current Assets:                  1,618.85     1,392.85

Total Assets:                    1,875.42     1,650.32

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Profit & Loss A/c For

 The First Quarter Ended March 31    2004         2003

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Sales:                             742.13       600.01

Gross Profit:                      320.85       233.00

Operating Profit:                   87.28        37.50

Other Income:                        5.37         8.19

Financial (Charges):                (0.42)      (0.47)

Profit Before Taxation:             82.45        39.25

Profit After Taxation:              52.95        24.05

Earnings Per Share (Rs):             1.65         0.75

Share Price (Rs) on 12-10-04:      108.00            -

Price/Earning Ratio:                65.45            -

Book Value of Share (Rs):           24.28        22.63

Debt/Equity Ratio:                  0:100        0:100

Current Ratio:                       1.58         1.63

Gross Profit Margin (%):            43.23        38.83

Net Profit Margin (%):              11.18         4.01

R.O.A. (%):                          2.82         1.46

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