This spinning unit of Mouza Rossa District Kasur has done well during the nine months (October 2004-June 2005) both in terms of sales and profitability. Its financial position also remained robust. The company has improved its capacity and maintains a good record of profit distribution. However financial cost was on the higher side.
The company's 3rd quarter financials of the current year (July 2005-June 2006) has been posted on its website.
During 3rd quarter, (Q3 January 2006-March 2006) yarn production was higher 11.98%, higher than same period last year (SPLY). Average count of yarn spun during 3rd quarter was 10.89% courser than SPLY. Yarn sales were quantitatively 19.367% higher. Average sales price of yarn decreased 5.21% during the quarter compared to same quarter of the year 2004-05. Financial charges for the quarter increased by 115% due to increase in interest rates.
Earning per share for the 3rd quarter amounted to Rs 1.96 (2005: Rs 1.71). The directors feel that for the current year (2005-06) the results, are so far satisfactory.
Ellcot Spinning Mills Ltd incorporated in Pakistan on December 22, 1988 as a public limited company. The company is one of the constituent members of a large industrial group namely, Nagina Group which has diversified interests in textile weaving and spinning, power generation and trading.
Its other sister concerns are Nagina Cotton Mills Ltd, Prosperity Weaving Mills Ltd, Ellahi International (Private) Ltd etc. Ellcot Spinning Mills Ltd is listed on Karachi and Lahore Stock Exchanges and is a subsidiary of Nagina Cotton Mills Ltd which owns 60.25% of its total 10.95 million shares. Nagina Cotton Mills Ltd together with other associated undertakings have 76% stake in the equity of the company.
The company is a textile spinning unit and comprises 49,728 spindles and related machinery which produce high quality yarns of 100% cotton, synthetic and polyester cotton blends.
Carded and combed yarns for weaving and knitting applications are produced in many blends. Part of over-all capacity of 49,728 spindles are 48 ring frames comprising 24,768 spindles through which fine count up 120 Ne can be produced.
Together, Nagina and Ellcot comprise 96,768 spindles and produce fortyeight million pounds (48 million lbs) of carded and combed yarns annually in 100% cotton and blends with synthetic fibres. The mills regularly produce a wide range of products from 7 Ne to 120 Ne as well as 2 Ply yarns.
The Spinning Division of the Group rejoices because of many satisfied customers in Europe, USA, Japan and the Far East who regularly use its high quality yarns to produce apparel fabrics, sheeting, canvass and knitted products. The share of the company is currently trading at Rs 26.90 per share which is nearly three times of the par value. During the last one year, market value of the share peaked at Rs 39 per share.
The company has excellent track record of profit distribution as during the last 10 years it has never skipped annual dividends. During the last five years it has good record of average annual cash dividend payout of 18% and in the period under review the company announced cash dividend at 20% (2004: 20%).
During the nine months under review the company attained 65.33% production capacity utilisation and its installed number of spindles increased to 49,728 spindles from 38,376 spindles.
During the nine months under review the company posted sales in terms of value at Rs 902.47 million and gross profit at Rs 135.72 million. Export sales amounted to Rs 137.91 million which comprised 15.2% total net sales of the company. The annualised estimate of sales figure works out to Rs 1,203 million which is much higher than last 12 months (FY 2003-04) audited figure of Rs 1,064.21 million. Gross Profit, finance margin substantially improved but finance cost at Rs 36.02 million were 86 times of last year's figure of Rs 0.42 million.
The company's pretax profit was Rs 65.43 million and its annualised estimate works out to Rs 87.24 million which is much higher than last year's (12 months) actual figure of Rs 80.55 million.
The overall operating result in terms of profitability and productivity is satisfying. Above all the financial ratios evidence that the financial backbone of the company is quite robust.
According to the cumulative three quarters' results of the current year (2005-06) posted on its website www.nagina.com, the company posted higher sales for nine months (July 2005-March 2006) at Rs 960.17 million as against same period last year (SPLY) at Rs 80.676 million. But profit was lower as compared to SPLY. During nine months of current year (9M July 2005-March 2006) the company posted net profit at Rs 45.46 million as against Rs 49.30 million in same period last year (9M July 2004-March 2005).
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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June 30 September 30
2005 2004
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Share Capital-Paid-up: 109.50 109.50
Reserves & Surplus: 246.71 215.21
Shareholders Equity: 356.21 324.71
L.T. Debts: 516.96 446.67
Deferred Liabilities: 35.26 26.15
Current Liabilities: 455.09 482.44
Fixed Assets: 886.48 785.51
L.T. Deposits: 0.30 0.33
Current Assets: 476.74 494.13
Total Assets: 1,363.52 1,279.97
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Profit & Loss A/c For
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9 Months Ended Year Ended
June 30 2005 Sept 30 2004
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Sales-Net: 902.47 1,064.21
Gross Profit: 135.72 139.69
Other Operating Income: 1.33 1.59
Finance (Cost): (36.02) (0.42)
(Depreciation): (55.71) (51.87)
Profit Before Taxation: 65.43 97.87
Profit After Taxation: 53.40 80.55
Earnings Per Share (Rs): 4.88 7.36
Dividend %: 20.00 20.00
Share Price (Rs) on 05-07-06: 26.90 -
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Financial Ratios
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Price/Earning Ratio: 5.51 -
Book Value Per Share: 32.53 29.65
Price/Book Value Ratio: 0.83 -
Debt/Equity Ratio: 59:41 58:42
Current Ratio: 1.05 1.02
Asset Turn Over Ratio: 0.66 0.83
Days Receivables: 17 20
Days Inventory: 126 122
Gross Profit Margin (%): 15.04 13.13
Net Profit Margin (%): 5.92 7.57
R.O.A. (%): 3.92 6.29
R.O.C.E. (%): 5.88 10.10
1) Plant Capacity & Production of Yarn
Converted 30/s Counts (Millions kgs)
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A) Installed Capacity: 11.931 9.207
Production Converted 30/s Count: 7.975 8.551
Capacity Utilization: 65.33 92.87
B) All Counts Production: 5.813 5.705
C) Number of Spindles Installed: 49,728 38,376
2) Power Generated Megawatt Hours: 29,414 46,215
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