During the year under review, the company registered net sales at Rs 3.348 billion (2002-03: Rs 2.734 billion) registering 22.5% growth over the preceding year's sales and at the same time record highest sales figure of its career. Since its introduction in 1981, Brite has become a strong detergent brand. In April 2004, a new improved version of Brite was launched. The properties of modified product contain formulation for enhanced stain removal and dirt clearing action.
The company emphasises that Brite is the only detergent in Pakistan which has the benefit of colour brighteners and fibre protection. It has also launched softlan and for that company claims that softlan is the first fabric softener manufactured in Pakistan. The relaunch of Colgate fluoride toothpaste was accompanied with hard hitting advertising campaign highlighting protection against cavities.
The marketing strategy for Palmolive soap is designed to strengthen the company's market leadership. During the year under review the company posted net profit after taxation at Rs 286.92 million which is the highest profit figure in its history.
The year has been termed by the company as record breaking year in terms of Colgate-Palmolive (Pakistan) Ltd was incorporated in the province of Sindh on December 5, 1977 as a public limited company and its shares are quoted on stock exchanges in Pakistan. The registered office of the company is situated at Lakson Square, Building No 2, Sarwar Shaheed Road, Karachi whereas its manufacturing facilities are located at G-6, S.I.T.E. Kotri District Dadu (Sindh).
This enterprise is joint venture between the Pakistani Conglomerate Lakson Group and American multinational company (MNC) Colgate-Palmolive Co USA. The MNC holds 30% of the company's total 12.23 million paid-up shares of Rs 10 each. The other international shareholder is Deutsche Bank International Ltd with 20.23% of the stock of the company.
Lakson Group has diversified interests in cigarette and tobacco insurance, paper and board, real estate commodity, food and personal care products, internet service providing and franchise of McDonald chain in Karachi and Urdu newspaper with the largest circulation in the upcountry whereas the newspaper has the second largest circulation in the country. Not only wide diversity is the identity of the group but also market leadership in almost all its enterprises is its hallmark.
The management process of the Group hovers around keeping each enterprise's business process at arms length so that each enterprise is exposed to competition. Offlate its businesses have been leveraged with information technology so that its businesses are totally integrated both vertically and geographically.
For the second consecutive year, Colgate-Palmolive (Pakistan) Ltd was declared winner of Corporate Excellence Certificate for the year 2002 in the Chemical & Allied Sector in Business and Industrial Category by the Management Association of Pakistan.
It is a blue chip company as its shares carry very high premiums. On 25th January 2004 the share's market price closed at Rs 288 per share which is nearly 29 times of the par value. During the last one year the market value of its share soared to Rs 289 from Rs 118 per share.
Apart from maintaining high financial fundamentals one of the main reasons of the increasing confidence of shareholders is its attractive profit distribution profile. According to the year wise financial highlights appended with the annual report, the company did not skip dividend for the last seven years and the dividend payouts ascended steep upward from 12.5% in 1997-98 to 100% in the year under review, 2003-04.
The company is mainly engaged in the manufacture and sale of detergents, personal and other products. Its product portfolio includes Colgate toothpaste, Palmolive soap, Max Dishwasher bar, Brite Total Fabric wash powder as well as Bonus Tristar detergent powder.
The company's brand building and marketing initiatives combined with continuous efforts to raise the levels of manufacturing and supply chain efficiency and productivity, at the same time ensuring high quality standards.
Significant progress has been made with several cost saving initiatives. The optimisation of purchasing and materials sourcing has also delivered significant savings. The use of e-auction practices and the expertise of Colgate Global Procurement Group have been important contributory factors.
The company has made major investments in capacity expansion and modernisation of manufacturing process and facilities. It continues to invest heavily in brands. During the years under comparison advertisement and sales promotion amounts were around Rs 252 million. It made additions in the fixed assets at Rs 59.7 million and transferred from capital work in progress at Rs 209.28 million. Additionally, it has booked, during the year under review, Rs 113.24 million in the account of capital work in progress.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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June 30
2004 2003
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Share Capital-Paid-up: 122.30 122.30
Reserves & Surplus: 526.34 361.72
Shareholders Equity: 648.64 484.02
L T Debts: 114.83 113.56
Deferred Liability: 56.00 19.00
L T Deposits: 4.03 3.70
Current Liabilities: 585.52 441.60
Tangible Fixed Assets: 558.16 336.69
Intangible Fixed Assets: 35.10 41.77
L T Loans: 4.21 3.75
L T Deposits: 2.73 4.68
Current Assets: 808.82 674.99
Total Assets: 1,409.02 1,061.88
Sales, Profit & Pay Out:
Net Sales: 3,348.31 2,734.29
Gross Profit: 961.99 757.29
Other Income: 10.96 12.00
Operating Profit: 450.35 292.30
Financial (Charges): (14.08) 22.02
(Depreciation & Amortisation): 41.04 30.96
Profit Before Taxation: 436.27 270.28
Profit After Taxation: 286.92 175.02
Dividend Cash @ 100%(2003: @ 70%): 122.30 85.61
Earning Per Share (Rs): 23.46 14.31
Share Price (Rs) Dated 25/01/2005: 288.00 -
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Financial Ratios:
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Price/Earning Ratio: 12.27 -
Book Value Per Share: 53.04 39.58
Price/Book Value Ratio: 5.42 -
Debt/Equity Ratio: 15:85 19:81
Current Ratio: 1.38 1.53
Assets Turn Over Ratio: 2.38 2.57
Days Receivables: 10 13
Days Inventory: 66 62
Gross Profit Margin (%): 28.73 27.69
Net Profit Margin (%): 8.57 6.40
R O A (%): 20.36 16.48
R O C E (%): 34.84 28.22
Capacity & Production (Quantities in Tonnes)
Installed Capacity 56,328 49,000
Actual Production 52,189 43,069
Capacity Utilisation (%): 92.65 87.90
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