Miscellaneous: GRAYS OF CAMBRIDGE (PAKISTAN) LIMITED - Year Ended 30 June 2006
During the year under review, the company posted sales at Rs 119.45 million as against Rs 100.54 million in FY05 (previous year registering 18.8% growth). This growth has been attributed to the management's efforts for expansion in product range and also exploring new markets. Nearly 97% of the sales was consigned to export.
During the year (FY06), the company attained great success in marketing cricket balls in Australian and New Zealand markets. Resultantly export of cricket balls reached 86,975 balls as compared to 78,641 balls in the preceding year.
The company posted net profit after taxation at Rs 20.73 million (FY05: Rs 18.08 million). Net profit amount in FY06 was 2nd lowest of the last ten years, while the decade's lowest figure was recorded for FY05, and the decade's highest figure at Rs 77.25 million was recorded in 2000.
The manufacturing setup of the company is located in Small Industrial Estate Sialkot (Punjab). The company has also been allotted land in the newly established Export Processing Zone in Sialkot and has plans to establish state of the art hockey ball manufacturing plant there. The completion of this project has been visualized within one year and a half.
Grays Cambridge (Pakistan) Limited was incorporated in Pakistan as a private limited company on June 1964 and went public in April 1986 and was listed on Karachi and Lahore Stock Exchanges in January 1987. The Initial Public Offer (IPO) was oversubscribed by 200 times a record response by public.
The company is primarily engaged in manufacturing and export of quality sports goods.
The industrial profile of the company is replete with gloring instances of pioneering spirit of its sponsors.
Late Anwar Khwaja, the first Managing Director of the company had intense desire to make the world's best hockey sticks in collaboration with H.J. Gray & Sons of Cambridge, England presently Grays of Cambridge (International) Limited. According to the company's Annual Report 2006, this desire culminated into formal inauguration of this Pak-British joint enterprise on May 08, 1965. The unit had already commenced commercial production on April 01, 1965 under the elite supervision of an English technician, D. Fosket who had made hockey sticks with his own hands for more than half a century. This great expert gave training to Pakistani workers carved them into a team of adroit craftsman inculcating his expertise, elegance and excellence.
During 1983, while the company continued progressively conventional hockey sticks (around 90 thousand sticks a year), the management acquired technical know-how from Toon Coolen of Netherlands and started making a Novelty Stick with U shaped head, approved by the Rules Committee of the International Hockey Federation. By blending the mechanization with their sticks, the local craftsmen produced hockey sticks which met with global acceptance as the best ever-made and the venture proved to be an international success.
The fact that at first 17,590 hockey sticks were produced in 1965, now it has achieved present volume of 174,400 sticks a year, has evidently placed Gray Pakistan squarely on the World Hockey Map.
Equally important was the year 1973 when a cricket ball manufacturing unit was established to produce balls with the world's most famous brand names "Duke & Sons" and "Gray-Nicolls." This unit has shown tremendous growth as evidenced by rising production of completely hand sewen cricket balls from a few thousand in its year of inception to around 86,970 a year at present. These balls are being used in first class as well as the test cricket in Pakistan and abroad.
The company also started diversifying its economic/financial interest and co-sponsored a leasing company named Grays Leasing Limited, listed on Karachi and Lahore Stock Exchanges and proved profitable and financially robust enterprise.
As regards, ownership of the equity of Grays of Cambridge (Pakistan) Ltd, Grays of Cambridge (International) Ltd England owns 39.8% and Anwar Khwaja Industries Ltd (another associated company) holds 5% of the company's stock (June 30, 2006 statistics). The company's directors and members of their families own 21.1% and National Investment Trust Ltd holds 8.7% of the company's stock.
The company's shares are blue chips as these are invariably quoted at very high market value. During the last one year, price of the share ranged between Rs 165 and Rs 272 per share. Recently, on 16th April 2007 the closing market price of the share was quoted at Rs 190 per share which is 19 times of the par value.
Some of the reasons for the high market value of its share are, excellent trade record of profit distribution, continuously rising sales and production figures and above all its robust financial health.
During the last ten years, the company has been very regular in profit distribution with high dividend rates for the year under review (FY06), the company announced cash dividend @ 175% which is the second highest in the last ten years, while the highest dividend @200% was announced for the year 1997.
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Performance Statistics (Million Rupees)
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30th June 2006 2005
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Share Capital-Paid-up: 16.33 16.33
Reserves: 263.36 267.02
Shareholders' Equity: 279.69 283.35
Current Liabilities: 17.60 14.26
Tangible Fixed Assets: 28.37 24.91
L.T. Investments: 101.88 104.18
L.T. Deposits: 0.40 0.29
Current Assets: 166.64 168.23
Total Assets: 297.29 297.61
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Sales Profit & Payout
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Sales: 119.45 100.54
Gross Profit: 45.64 39.39
Other Operating Income: 7.43 5.58
Profit from Operations: 19.98 14.45
Financial (Costs): (0.75) 0.70
(Depreciation): (3.33) (3.63)
Share of profit from Associate: 9.89 (11.87)
Profit Before Taxation: 29.12 25.62
Profit After Taxation: 20.73 18.08
Earnings Per Share (Rs): 12.69 11.07
Dividend Cash (%): 175.00 150.00
Share Price (Rs) on 16-04-07: 190 -
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Financial Ratios:
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Price/Earning Ratio: 14.97 -
Book Value Per Share: 171.27 173.54
Price/Book Value Ratio: 1.11 -
Debt/Equity Ratio: 0:100 0:100
Current Ratio: 9.47 11.80
Asset Turn Over Ratio: 0.40 0.34
Days Receivables: 71 63
Days Inventory: 257 285
Gross Profit Margin (%): 38.20 39.17
Net Profit Margin (%): 17.35 17.98
R.O.A. (%) : 6.97 6.08
R.O.C.E. (%): 7.41 6.38
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Plant Capacity & Production:: : As the company is engaged in manufacturing of man made sports goods and its production its dependent upon the efficiency of the person engaged, hence the capacity of the unit could not be determined.
COMPANY INFORMATION: : Chairman: Neil Douglas James Gray; Chief Executive: Khawar Anwar Khawaja; Director: Muhammad Tahir Butt; Company Secretary: Muhammad Adnan Sarwar; Chief Financial Officer: Muhammad Azeem; Registered Office & Works: Small Industries Estate, Sialkot-4, Punjab.
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