Ismail Industries Limited (ISL)

Ismail Industries Limited (ISL) is making biscuits since 1950s. However, the company launched its flagship brand CandyLand in the year 1988 and ever since has expanded its horizons in multiple industries. Over the years, Ismail Industries has expanded horizontally by launching brands such as Bisconni (biscuits and cookies) and SnackCity (chips, peanuts, etc). They have also done vertical integration through Astro Plastics, which manufactures packing and plastic films.
Ismail Industries is an ISO 22000 certified company, and they also have certification from SANHA (South African National Halal Authority) a leading authority in the certification for Halal products around the world. For over two decades, Ismail Industries Limited has been exporting its products to more than 40 countries in North America, Europe, Australia, Africa, Far East and the Middle East
FINANCIAL HIGHLIGHTS:
FY12: Over the years, Ismail Industry Limited has had a steady sales growth. This pattern saw a continuation in FY12 also. However, after FY12, growth of top line has been slowing down significantly. The increase in revenue from Rs 7,755 million in FY11 to Rs 9,276 million in FY12 also helped the company to increase its profits.
The bottom line increased during the period from Rs 306 million in FY11 to Rs 367 million in FY12, a massive 20 percent increase. Although, the company faced a higher cost of doing business during the period, higher volumetric sale and economy of scales help the company to offset the cost. That's why the gross margin and net margin increased by 200 and 100 basis points respectively.
The top line of the company consisted of the food sector and plastic sector. But, the food sector is the flagship business of the company and contributed Rs 8,336 million in the top line of the Ismail industry that is a 22 percent growth in the year-on-year analysis. CandyLand has shown steady growth in all sub-sectors of the business for example chocolate, candies, etc.
The company started a consolidation of Bisconni during this period. The plastic division, on the other hand, gave steady growth to the firm's revenue and the bottom line.
FY14: In FY14, Ismail Industries reported a gigantic profit after taxes of Rs 502 million compared to Rs 358 million in FY13, a 40 percent increase in the year-on-year analysis. The company was able to absorb the cost well this time around. Both the gross profit and net profit margins gained 100 basis points. Besides the top line, the other income also played a major part in the increase of net profit margin. A major chunk of another income has come from the sale of production scrap.
The top line has continued a slow growth of 6 percent in the year-on-year comparison, and a large part of this top line came from the food division that sustained a growth of 8 percent throughout the year. The food division also reflected an increase of Rs 910 million in operating profit in FY14. That's a 3.29 percent increase from FY13 while plastic division reflected an increase of Rs 154 million in operating profit in the year-on-year analysis.
Recent performance:
9MFY15: Ismail Industries sales are up by 15 percent due to a strong performance by the food division in the nine-month period. The company posted an after-tax profit of Rs 360 million or Rs 7.13 per share during the first nine months of the fiscal year 2015. It is up 23 percent compared to Rs 292 million or Rs 5.78 per share it earned in the corresponding period of the last fiscal year.
The company's control on its supply chain and other cost related issues have paid off. Similarly, the company took advantage of historically low prices of commodities and decrease in fuel prices during the nine-month period. However, the gross profit margin and net profit margins both stayed flat during the period under discussion.

=====================================================

Ismail Industries Limited

=====================================================

Rs (mn)                         9MFY14   9MFY15   chg

=====================================================

Net Sales                        7,919    9,120   15%

Cost of Goods sold               6,339    7,294   15%

Gross Profit                     1,580    1,826   16%

Selling and distribution expense   709      729    3%

Administrative expense             834      988   18%

Other operating expenses           334      487   46%

Other Income                        52       49   -5%

Finance Cost                       465      560   20%

Profit before taxation             414      496   20%

Taxation                           122      136   11%

Profit for the year                292      360   23%

Earnings per share                   6        7   23%

Gross profit margin                20%       20%

Net profit margin                   4%        4%

=====================================================