Bata Pakistan Limited

Bata Shoes is a company with a great history. The company was founded in 1894 and after multiple ups and downs it has become the pioneers of shoe making and has established itself as a market leader in quality shoes all over the world. Similarly, Bata Pakistan traces its history seventy-three years ago long before partition. The Company was incorporated in Pakistan as Bata Shoe Company (Pakistan) Limited in 1951 and went public to become Bata Pakistan Limited in the year 1979.
The company has a strong retail network comprising of more than 400 retail outlets, 467 registered wholesale dealers, 13 wholesale depots, 28 wholesale distributors and 41 DSP wholesale franchises across the country. Bata Pakistan is a multinational company which has different brand lines in order to satisfy the diverse segments of the market. At the moment, Bata Pakistan has following brands under its belt: Marie Claire, Hush Puppies, Power, Bubble Gummers, North Star, Scholl, Bata Comfort and Weinbrenner.
Financial history
CY12:
Over the years, the financial history of Bata Pakistan has been stable. The company saw a gradual increase in both sales and the profits. However, the company has seen a significant increase in its fortunes since CY10. The upward trend continued in CY12. In terms of top line growth, the company saw its highest numbers ever and clocked in Rs 11.477 billion, a growth of 17 percent in the year-on-year analysis. The profit for the company went up tremendously to Rs 1,021.801 million.
This significant increase largely came from selling of more than 11.8 million pairs of shoes in the period under discussion. During CY11 the company sold nearly 11 million pairs of shoes. In terms of margins, the company saw an increase of more than 100 bps in its gross profit margins. Similarly, the company was also able to increase its net profit margins for the year by 100 bps.
CY13: Year 2013 started with a bang for Bata Pakistan. In the first quarter, the company performed well and reported an increase of 14 percent in the top line. The company also reported a 34 percent increase in its profits during the first quarter.
Bata Pakistan reported an 11 percent increase in its top line during CY13. On the other hand, the company was also able to increase its non-current assets 31 percent in the year-on-year analysis. The major chunk came from the company's investment in property, plant and equipment. The profit after tax grew by 21 percent in year-on-year comparison. Bata Pakistan also increased its other income by getting a 31 percent increase in short-term investment profit from 2012. The margins also improved during the period and gross margin recorded an increase of 200 bps while the net margin saw an improvement of 100 bps.
CY14: In 2014, the performance remained satisfactory. The margins for the year stayed flat and sales only grew by 8 percent. During the year, the company produced 17 million pairs of shoes, which are almost one million pairs higher than what Bata produced last year. The business reported after tax profit of Rs 1.339 billion which is 9 percent higher than last year.
The other income has increased almost 91 percent in the year-on-year comparison. This other income largely came from gain on disposal of property, plant and equipment, the reversal of property taxes and income from discounting of supplier invoices. Income from non-financial assets stayed flat during this period.

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Bata Pakistan Limited

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Rs (mn)                  1QCY14 1QCY15        Chg

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Sales                     2,984   3277        10%

Cost of sale              1,853   2055        11%

Gross Profit              1,132   1222         8%

Distribution cost           581    654        13%

Administrative expenses    194     232        19%

Other expenses              29      28        -4%

Other income                79      31       -61%

Operating profit           406     339       -17%

Finance cost                 7       8         4%

Profit before taxation     399     331       -17%

Taxation                   116     101       -13%

Profit after taxation      283     230       -19%

Earnings per share       37.43      30        n/a

Gross profit margin         38%     37%       100

                                         bps down

Net profit margin            9%      7%       200

                                         bps down

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