During the year under review the company has made key achievement of regaining Market Volume Leadership. Its prominent brand is Gold Leaf which scaled new heights in growth and accounted for 48% of total company's volume.
The company recorded turnover - net of sales tax at Rs 26.511 billion (2004: 22.04 billion) and gross profit at Rs 4.529 billion (2004: 3.482 billion) exhibiting 20.3% and 30.1% growth respectively over 2004. Operating profit at Rs 2.38 billion was the highest ever in its history and was 65% higher than 2004. Profit before tax and profit after tax were higher by 97% and 99% vs last year respectively.
The company's continued focus on process re-engineering led to the automation of its "procure-to-pay" process through the implementation of SRM system (Supplier Relationship Management). Furthermore, the company's continued focus on realignment and integration of supply chain into the business resulted in process efficiencies and value addition.
Pakistan Tobacco Company Ltd is engaged in the manufacture and sale of cigarettes. It is a public limited company incorporated in Pakistan having its registered office situated at Evacuee Trust Complex, Aga Khan Road, Sector-5/1 Islamabad. Its shares are quoted on Karachi, Lahore and Islamabad Stock Exchanges. The company was listed on the Karachi Stock Exchange in 1956. The URL of the company's website is www.ptc.com.pk. British American Tobacco (Investments) Ltd is its holding company and is incorporated in the United Kingdom. The holding company owns 241.05 million shares of the company which works out to 94.4% stake in its equity.
During the year under review (FY 2005) the company increased its production to 31,758 million cigarettes (2004: 27,001 million cigarettes) showing 17.6% increase over preceding year's and attained 95.9% capacity utilisation as compared to 95.8% capacity utilisation in the preceding year.
The manufacturing facilities are located in two provinces viz one in NWFP at Akora Khattak District Nowshera and the other in Punjab in Jhelum.
It has been reported that both production facilities were recertified for ISO 14001 and achieved "Evergreen Status" for life time. This status was awarded for six consecutive audits with zero major and minor non-compliance.
During the year under review, the company achieved a record sales volume of 30.6 billion sticks (cigarettes) 14% growth vs last year. The incremental sales volume is impressive in the backdrop of industry's overall growth estimated at 3%.
It has been reasoned in the report under review that a number of factors have supported the volume growth. The aggressive investment behind the brands over the years, greater emphasis on the understanding of consumer behaviour, use of innovative and effective communication tools and focus on trade support yielded a consistent and strong growth in the company's brand portfolio.
The stellar contributor in the volume growth was it Gold Flake brand. The brand achieved volume growth of 36% over 2004 and further consolidated its position as the largest selling brand in its portfolio, with a volume of 14.6 billion sticks and accounted for 48% of total company volume.
The other prominent brand was Gold Leaf which had another remarkable year and grew by 9% making its third consecutive year of growth.
Benson & Hedges (B&H), the largest franchise in the premium segment, strengthened its foothold in key accounts and restaurants across Pakistan.
Dunhill King Size range was launched with Activated Charcoal Filter in December 2005, in the premium segment.
The other brand Capstan re-affirmed its overwhelming strength of the Medium Segment in 2005. Further, despite priced above competitive others, in the Medium segment, it was able to gain the competitions volume and achieved 5.5% growth over 2004.
Embassy is the only brand in the company's portfolio that faced volume erosion in the face of stiff competition from the cheap tax evaded offers from 'illicit sector.'
The new Managing Director and Chief Executive of the company, emphasized that the key achievement for 2005 is the regain of Market Volume Leadership after many years (source: Independent Research).
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Performance Statistics (Million Rupees)
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31st December 2005 2004
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Share Capital-Paid-up: 2,554.94 2,554.94
Revenue Reserves: 1,084.47 707.88
Shareholders Equity: 3,639.41 3,262.82
Deferred Taxation: 724.67 624.47
Current Liabilities: 3,604.37 3,137.47
Fixed Assets: 3,798.19 3,564.41
Investment in Subsidiary Company: 5.00 5.00
L.T Loans: 17.78 16.32
L.T Deposits & Prepayments: 11.36 4.43
Current Assets: 4,136.12 3,434.60
Total Assets: 7,968.45 7,024.76
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Sales, Profit & Pay Out
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Turnover-Net of Sales Tax: 26,511.74 22,039.49
Gross Profit: 4,529.60 3,482.62
Operating Profit: 2,377.66 1,444.63
Other Income: 34.42 14.59
Finance (Cost): (45.35) (36.54)
(Depreciation): (426.89) (390.21)
Profit Before Taxation: 2,082.06 1,056.04
Profit After Taxation: 1,321.92 665.23
Earnings Per Share (Rs): 5.17 2.60
Dividend Rs Per Share: 3.70 2.00
Share Price (Rs) on 03/04/06: 65.00 -
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Financial Ratios
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Price/Earning Ratio: 17.56 -
Book Value Per Share: 14.24 12.77
Price/Book Value Ratio: 4.56 -
Debt/Equity Ratio: - -
Current Ratio: 1.15 1.09
Asset Turn Over Ratio: 3.32 3.13
Days Receivables: - -
Days Inventory: 133 60
Gross Profit Margin (%): 17.09 15.80
Net Profit Margin: 4.99 3.01
R.O.A. (%): 16.58 9.46
R.O.C.E (%): 30.29 17.11
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CAPACITY & PRODUCTION: Against an estimated manufacturing Capacity of 33,114 (2004:28,174) million cigarettes, actual production was 31,758 (2004:27001) million cigarettes. There was no production through any outside manufacturing source as actual production was sufficient to meet the market demand.
COMPANY INFORMATION: Chairman: Aslam Khaliq; Managing Director & CEO: Toh Ah Wah; Company Secretary: Tajamal Shah; Registered Office: Evacuee Trust Complex, Aga Khan Road Sector 5/1 Islamabad 44000; Web Address: www.ptc.com.pk Factories: P.O. Akora Khattak Tehsil & District Noshera NWFP G.T. Road Kala Gujran, Jhelum; Regional Sales Offices: North Punjab & NWFP, Rawalpindi; Central Punjab DHA Lahore; Southern Punjab Multan; Sindh & Balochistan Karachi.
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