Automobile Parts & Accessories: ATLAS BATTERY LIMITED - Year Ended 30-06-2005
The company registered record high sales and its brand (AGS) is reported to be preferred choice of the users. However profitability was on the lower side as gross margin substantially eroded mainly because of substantial unabsorbed cost pressure particularly of raw materials resulting in higher volume at lower profits. Operating expenses increased 23% in line with increase in sales.
Resultantly, operating profit remained lower than the preceding year's. Finance cost remained high due to increased mark up rates and higher utilisation of running finance facilities.
Profit before taxation at Rs 54 million (FY 2003-04: Rs 117.69 million) was the lowest amount of last three years). Profit after taxation at Rs 40.85 million works out to Earning Per Share (EPS) at Rs 8.88 as against Rs 18.16 per share in the preceding year.
Atlas Battery Limited was incorporated as a public limited company on October 19, 1966. Its registered office and manufacturing facilities are located at SITE Karachi and branch offices at Lahore, Rawalpindi, Faisalabad and Sahiwal.
The shares of the company are quoted on Karachi and Lahore Stock Exchanges and it is engaged in manufacturing and sales of automotive and motorcycle batteries.
The company is one of the constituent members of a large corporate group - Atlas Group which has diversified interests in the assembly of automotive cars and motorcycles, manufacture of spare parts of automobile, motorcycles and tractors, insurance, investment bank, power product, lubricants, financial brokerage and asset management.
On June 30, 2005, the closing date of its account under review, more than 58% of its total 4.59% shares were owned by its associated companies and related parties. The five directors of the company held 5.1% of the company's stock. Its 1,105 individual investors owned 34.00% of the companies stock.
The company's shares are trading at quite high price at stock market. During the last 10 year's quotation in the month of June shows that its highest price was recorded in 2004 at Rs 154 per share and the lowest price at Rs 66.80 per share of Rs 10 each. Recently on November 8, 2005, the closing quotation was recorded at Rs 63.50 per share.
The last one year's stock market statistics shows that the market value of the share remained within a wide spread of Rs 62 and Rs 115 per share. From the above data it can be observed that the higher market value is not only a recent phenomenon of rising demand in the automotive sector, but its performance and the hard fundamentals has attracted the investors attention.
If only two factors for the high market value are to be traced then first and foremost is the leadership of the Group by the industrialist Yusuf Shirazi and the second most important factor is its attractive profit distribution profile as during the last 10 years the company has never skipped dividend and payouts have also been invariably attractive.
During the last ten years the cash dividend payout rate remained between 25% (2005) and 60%, (2004). In addition to cash dividend, in the year under review the company announced bonus stock dividend at 15% (2004: 40%).
During the year under review (FY 2004-05) the company made additions in the fixed assets in the sum of Rs 66.43 million (FY 2003-04: Rs 26.87 million) mostly in plant and machinery, factory building and equipment. The financial position of the company further strengthened because of impressive growth in turnover. The strong financial backbone of the company is evidenced from its solvency and liquidity ratios as well as breakup value of the share.
During FY2004-05 the company posted sales at Rs 949.75 million registering impressive growth of 23.32% over the figure of preceding year and the turn was record highest in the company's history.
It has been reported that the company holds the legacy of leadership for supplying quality batteries to customers. During the year the company introduced two new products especially designed for diesel vehicles which received good response from users. It is stated that its AGS batteries are now preferred choice.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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September 30 March 31
30th June 2005 2004
2005 2004
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Share Capital-Paid-up: 77,696 77,696
Share Capital-paid-up: 49.98 32.84
Reserves: 184.54 180.54
Shareholders Equity: 234.52 213.38
L.T. Debts: 60.00 -
Deferred Liabilities: 34.60 22.40
Current Liabilities: 176.62 140.49
Fixed Assets: 151.19 93.23
Intangible Assets: 0.38 0.75
L.T. Deposits: 2.61 0.53
Current Assets: 351.56 281.76
Total Assets: 505.74 376.27
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Sales, Profit & Pay Out
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Sales: 949.75 770.11
Gross Profit: 157.58 173.48
Operating Profit: 61.29 95.21
Other Income: 5.97 35.24
Finance (Cost): (9.20) (4.13)
(Depreciation): 18.05 12.76
Profit Before Taxation: 54.00 117.69
Profit After Taxation: 40.85 83.52
Earnings Per Share (Rs): 8.88 18.16
Dividend Cash Per Share (Rs): 2.50 6.00
Dividend Bonus Stock: 1.50 4.00
Share Price (Rs) on 8/11/2005: 63.50 -
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Financial Ratios
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Price/Earning Ratio: 7.15 -
Book Value Per Share: 46.92 64.97
Price/Book Value Ratio: 1.35 -
Debt/Equity Ratio: 20:80 0:100
Current Ratio: 1.99 2.00
Asset Turn Over Ratio: 1.88 2.05
Days Receivables: 15 19
Days Inventory: 98 63
Gross Profit Margin (%): 16.59 22.50
Net Profit Margin (%): 4.30 10.84
R.O.A (%): 8.08 22.20
R.O.C.E (%): 12.41 35.42
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Plant Capacity
The Production capacity of plant cannot be determined as this depends on relative proportion various types and sizes of batteries produced.
Company Information: Chairman: Yusuf H. Shirazi; Chief Executive: Vazeer Ali;
Director: Aitzaz Shahbaz; Company Secretary: Muhammad Iqbal; Registered Office/Factory: D-181 Central Avenue, S.I.T.E Karachi-75730; Web Address: www.atlasbattery.com.pk Other Offices: Zonal Office Karachi-Sukkur Office
Zonal Office Lahore-Faisalabad Office-Multan Office-Peshawar Office-Rawalpindi Office-Sahiwal Office.
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