It is indeed a pleasure to see that the company has turned the table by posting profit in FY06, the year under review as against loss in FY05, the previous year. This is a commendable performance in the midst of higher finance cost and sui gas cost of generation.
With the posting of profit, the company's break up value of the share improved to Rs 14.75 in FY06 from Rs 12.12 per share in FY05. This has boosted the market value of its share substantially. On January 15, 2007, the closing price of the share was quoted at Rs 34.50 per share, which is more than three times of the par value.
The prescription for successful results seems, the management's long term strategy of improving production efficiencies and upgradation of production facilities in terms of BMR/Expansion. Nothing can yield result unless there is motivated workforce and super charged leadership. The picture clips of PC Bhurban Brain storming session and of company's cricket team as well as production staff are proof of the positive internal environment which can move mountain.
Samin Textiles Limited is a public limited company, listed on Karachi and Lahore Stock Exchanges. It was incorporated in the province of Punjab on November 27, 1989 having its registered and head offices situated in 5-C, Main Gulberg Lahore.
It is primarily engaged in the business of manufacturing and sale of cloth. Its annual production capacity has been rated at 21.443 million running meters of cloth. The manufacturing facilities of Samin Textiles Limited are located in Distt-Kasur at 8th km Manga-Raiwind Road. The company has been running its plant at very near to full production capacity, as in FY06, the period under review, the company's utilised capacity works out to 92 percent as against 93 percent in FY05 the previous year.
Its manufacturing facilities are equipped with 177 looms. During FY06, the company made additions in the fixed assets at the capital outlay of Rs 237.7 million out of which Rs 183.1 million have been incurred for plant and machinery. The company leadership has set its eyes on increasing production efficiencies which is evident from the implementation of BMR and expansion programmes.
The various picture clips of newly installed looms, included in the Annual Report 2006, are the proof of efforts made to improve its production facilities.
The company has published a table showing the acquisition/plan to acquire looms and this shares that the company has targeted to have 200 looms in near terms.
During FY06, the company posted net sales at Rs 1.613 billion and gross profit at Rs 190.82 million. Last year's profit and loss account for the company was drawn for nine months, so the figures of both years ie FY06 and FY05 are not comparable. Last year's annualised data figures out to Rs 1.709 billion for sales and Rs 179 million for gross profit, from the foregoing analysis it can be seen that FY06 sales is less and gross profit are more than FY05 annualised figures.
During FY06, the company posted lower distribution cost at Rs 58.37 million as compared to Rs 78.10 million in the preceding year FY05.
FY06 also absorbed much larger finance cost at Rs 104.01 million whereas last year's finance cost was less at Rs 54.12 million. The directors in their report wished that in FY06 net results would have been much healthier, had the following costs would have remained under control. According to them finance cost shot up by 100%, Sui gas cost for power generation increased by 35% and cost of service also increased by 35% as compared to the previous year.
During FY06 the company posted profit before taxation at Rs 42.18 million and Net Profit after taxation at Rs 35.10 million as compared to FY05 pretax loss of Rs 6.11 million and after tax loss of Rs 18.86 million respectively.
As an attempt to diversify its business the company has invested in the equity of Security General Insurance Company Ltd on his connection, an investment of Rs 15.00 million has been made in the shares of the said company. At the same time the company would like to utilise the sale proceeds of this investment towards, BMR/Expansion Plan; Additional working capital requirement; to pay dividend to its shareholders; for necessary expenditure for the feasibility study and preliminary expenses for setting up of other projects.
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Performance Statistics (Million Rupees)
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30th June 2006 2005
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Share Capital-Paid-up: 133.64 133.64
Un-appropriated Profits: 63.48 28.38
Shareholders Equity: 197.12 162.02
Surplus on Revaluation of Fixed Assets: 66.65 -
Subordinated Loan: 133.07 133.07
Other L.T. Debts: 184.08 236.19
Deferred Liabilities: 2.34 3.04
Current Liabilities: 857.00 922.96
Fixed Assets: 745.53 642.96
Investment in Associate: - 50.17
L.T. Deposits: 6.25 2.25
Current Assets: 688.48 761.90
Total Assets: 1,440.26 1,457.28
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Profit & Loss A/c:
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For 9
For Year Months Period
Ended June 30 Ended June 30
2006 2005
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Sales-Net: 1,613.89 1,281.57
Gross Profit: 190.82 134.15
Other Operating Income: 9.92 1.37
Finance (Cost): (104.02) (54.12)
(Depreciation): (59.23) (45.04)
Share of Income From Associate: 28.67 13.00
Profit/(Loss) Before Taxation: 42.18 (6.11)
Profit/(Loss) After Taxation: 35.10 (18.86)
Earnings Per Share (Rs): 2.63 (1.41)
Dividend: - -
Share Price (Rs) on 15-1-07: 34.50 -
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Financial Ratios
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Price/Earning Ratio: 13.12 -
Book Value Per Share: 14.75 12.12
Price/Book Value Ratio: - 2.33
Debt/Equity Ratio: 31.68 44:56
Current Ratio: 0.80 0.83
Asset Turnover Ratio: 1.12 1.68
Days Receivables: 33 59
Days Inventory: 90 118
Gross Profit Margin (%): 11.82 10.47
Net Profit Margin (%): 2.17 (1.47)
R.O.A. (%): 2.44 1.29
R.O.C.E. (%): 6.02 3.53
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Capacity Installed & Actual Production (Million Running Meters)
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Rated Capacity (Cloth): 21.443 17.438
Actual Commercial Production: 19.728 16.218
Capacity Utilisation (%): 92.00 93.00
B) Number of Looms Installed: 177 186
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COMPANY INFORMATION: Chairman & Chief Executive: Sarmad Amin; Chief Financial Officer/Company Secretary: Safdar Hussain Tariq; Registered Office/Head Office: 50-C, Main Gulberg Lahore; Website: www.samintextile.com Factory: 8th Km Manga-Raiwind Road, Distt Kasur.
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