This is a Rs 20.6 billion private sector enterprise posting net profit after taxation at Rs 1.69 billion. Capital Expenditure went up by 1.129 billion from Rs 0.684 billion in the preceding year. Its contribution to the national exchequer was 79.5% of its wealth.
This is the first tobacco company in South East Asia to get ISO 9000 and ISO 14000 certifications for two of its key divisions namely Central Analytical Services Laboratory and Leaf Devise.
The plant has now been qualified for re-certification of ISO-14001:1996 and has passed the surveillance audit of ISO-9001-2000 for the year. SAP has been successfully implemented within eight months and is smoothly operational at the company since April 2005. The company has also embarked on an ambitious effort to upgrade its machinery and equipment.
High speed machineries have already been installed in filter making and packing areas. Lakson Tobacco emphasises that it is an equal opportunity employer and provides direct and indirect employment to thousands of Pakistanis belonging to different provinces, cities, towns and other areas of the country.
The 36th AGM of Lakson Tobacco Company Ltd is scheduled on 26th September 2005 and one of the items on the Agenda of AGM is declaration of final cash dividend @145% in addition to the interim dividend @20% already paid.
It has been clarified that dividends are now required to be recognised as a liability at the time of their declaration rather than at the balance sheet date. Therefore, the appropriation for the final year 2005, will be reflected in the financial statements for the year 2006.
The company was incorporated in Pakistan on February 10, 1969 as a public limited company and its shares are quoted on Karachi and Lahore Stock Exchanges. The Lakson Tobacco share is considered blue chip and at present it share has been quoted at Rs 235 per share.
The market capitalisation of the share has reached more than 23 times of its par value. During the last one year the market value of the share ranged between Rs 176.05 and Rs 326 per share.
The company is engaged in the manufacture and sale of cigarettes and tobacco.
The installed production capacity for the financial year 2004-05 (FY 2004-05) has been rated at 42,473 million cigarettes and the capacity utilisation works out to 70.41%. The company is marketing brands which are prominent and hold consumer preference.
Some of its brands are Morven Gold, Royals, Red & White, Diplomat and K2. The company continues to invest in brands through all BTL media. Morven Gold remained overall market leader, K2 conducted the biggest BTL activity of the year in Pakistan through series of 89 entertainment shows. A fresh visual campaign for Royals Filter was launched in early 2005 and Rescue based theme was maintained.
For Morven Gold new concept-based visuals were launched with a man-and-machine combination and with improved visuals that imparted fresh look. Close consumer contact initiatives were undertaken throughout the year and smokers were contacted directly to communicate the improvements in quality and taste specially that for Red & White.
The manufacturing facilities of the company are spread over three provinces of the country. Factory No 1 and 2 are located in Sindh at SITE Kotri and Korangi Industrial Area Karachi respectively. Two factories are situated in Punjab at Quadirabad (Distt Sahiwal) and Mandra Distt Rawalpindi. In NWFP the factory is located at Ismaila (Distt Swabi).
Commencing the business of manufacturing and marketing of cigarettes as third largest tobacco company in Pakistan at the start of the 1970s, it is today holding leading position in terms of market share.
The company believes that it should continue investments for expansion, modernisation and automation to maintain the status of a key player in the tobacco industry. During the year under review its capital expenditure stood at Rs 1.129 billion.
The company undertook a mammoth task in 2005 to replace the existing ERP (Enterprise Resource Planning) system with the world renowned business solution - SAP (System Application and Products in Data Processing). SAP went live in the first week of April 2005.
In the Finance Department, the Electronic Banking System and its integration with SAP for payments has reduced transaction time and eliminated extra cost and time incurred from executing transactions manually.
During the year under review, the sales turnover of the company was posted at Rs 20.585 billion (2003-04: Rs 17.308 billion) showing increase by 18.93% over preceding year's. The turnover is all time highest end sales growth is impressive. What is more significant is that the sales growth was achieved across all brands.
Earnings per share (EPS) improved from Rs 24.90 Rs 32.84% - 32% higher than previous year. Overall cost of goods sold decreased by 1.6%.
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Performance Statistics (Million Rupees)
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30 June 2005 2004
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Share Capital-Paid-up: 513.17 513.17
Reserve & Surplus: 3,902.32 2,580.46
Shareholders Equity: 4,145.49 3,093.63
Surplus on Revaluation of
Fixed Assets-Net of Tax: 8.27 13.66
Deferred Taxation: 174.08 157.50
Current Liabilities: 1,365.02 1,757.62
Fixed Assets: 2,014.01 1,466.89
Intangible Assets: 125.07 70.55
Investment in a Subsidiary Company: - -
L.T. Loans: 1.41 2.20
L.T. Deposits & Prepayments: 14.07 8.63
Current Assets: 3,538.30 3,474.14
Total Assets: 5,692.86 5,022.41
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Sales, Profit & Pay Out
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Turnover (including sales tax of Rs 2,736 million
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(2004: Rs 2,317 million): 20,584.64 17,307.60
Gross Profit: 4,080.29 3,149.51
Other Operating Income: 55.65 31.99
Operating Profit: 2,581.03 1,948.27
Financial (Charges): (9.08) (19.17)
(Depreciation): (461.43) (181.58)
Profit Before Taxation: 2,571.95 1,929.11
Profit After Taxation: 1,685.04 1,277.74
Earnings Per Share (Rs): 32.84 24.90
Dividend Cash (%): 165.00 125.00
Share Price (Rs) on 02/09/05: 235.00 -
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Financial Ratios
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Price/Earning Ratio: 7.15 -
Book Value Per Share: 80.78 60.28
Price/Book Value Ratio: 2.91 -
Debt/Equity Ratio: 0:100 0:100
Current Ratio: 2.59 1.98
Assets Turn Over Ratio: 3.62 3.44
Days Receivable: 14 1
Days Inventory: 24 38
Gross Profit Margin (%): 19.82 18.20
Net Profit Margin (%): 8.19 7.38
R.O.A (%): 29.60 25.44
R.O.C.E (%): 38.93 39.14
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Capacity & Production
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(Number of Cigarettes in Millions)
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A) Installed Capacity: 42,473 37,872
Production: 30,754 28,433
Capacity Utilization (%): 70.41 75.08
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COMPANY INFORMATION: Company Information: Advisor: Sultanali Lakhani; Chairman & Chief Executive: Iqbal Ali Lakhani; Director: Shahid Ali Khan; Director & Company Secretary: Ramazan Ali Halani; Registered Office: Lakson Square Building No 2 Sarwar Shaheed Road Karachi-74200; Web Address: Not Reported; Factories: E/15, S.I.T.E. Kotri Distt. Dadu (Sindh); Plot No 2, Sector No 17, Korangi Industrial Area, Karachi Sindh; Quadirabad Distt. Sahiwal (Punjab); Village, Mundra Tehsil Gujar Khan Distt. Rawalpindi; (Punjab); Ismaila Distt Swabi (NWFP).
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