Since 1999 the company has never skipped dividend and invariably the payouts were generous at 25% per annum.
The company's successful implementation of BMR programme has provided it competitive edge as well strong base for producing high profit and giving robustness to its financial backbone.
Having produced creditable performance, the directors still feel that there is tremendous potential for growth and improvement at Island Textile Mills.
They plan that in the current year they would venture upon production of value added polyester cotton yarn catering for niche markets by providing specialised products to the customers/buyers.
Island Textile Mills Ltd was incorporated in Pakistan as a public limited company on May 20, 1970. Its registered office is located in Textile Plaza MA Jinnah Road Karachi.
Its principal business is manufacture and sale of yarn. Its manufacturing facilities are located at Sindh Industrial Trading Estate at Kotri Distt Dadu.
This textile spinning unit is equipped with 19,200 spindles and all these spindles were in working order showing smooth production line.
The production capacity of the plant has been rated in terms of 20's count of yarn and the production of actual count has been also converted into 20's count for the purpose of recording. The installed capacity of the plant has been rated at 5.372 million per annum.
During the year 2002 ended 30th Sept. 2003 (FY 2002-03) the company spun 7.108 million kgs which by for exceeded the production capacity.
In the preceding year the company recorded output of 5.987 million kgs. The company attained 132.31% utilised capacity and increased output by 18.72% over the preceding year's figure.
At the close of the financial year the fixed assets of the company were at Rs 346.60 million.
The fixed asset base registered substantial expansion as it enhanced from Rs 229 million.
During the year the company made additions in fixed assets by Rs 30.14 million which were mostly in plant and machinery.
The directors rejoice over undertaking of the Balancing, Modernisation and Replacement (BMR) programme as it has provided edge to compete.
They thank to the Almighty Allah for that, as BMR has not only enabled them to survive the present competitive but also has been able to provide remarkable operating results.
During the year under review, Island Textile Mills generated sales at Rs 643.90 million as compared to Rs 510.31 million sales posted in the preceding which is the highest ever sales amount and 26.1% higher amount over the preceding year.
Gross margin improved substantially to 15.8% from 13.94% and boosted the Gross Profit to Rs 101.72 million which is also the record highest figure.
Despite 26.1% rise in sales, the increasing selling expenses were only minimal. The increase in sales was also due to the efficiency of marketing department as the "days receivables" "days inventory" also reduced, unlocking substantial liquidity. Inevitably the financial charges reduced by more than Rs 5 million.
The net profit amount before taxation by Rs 21.2 million (by 75.3%) over the preceding year's.
The company's net profit after taxation produced Earning Per Share (EPS) at Rs 62.63.
The market value of its share at Rs 148.20 is nearly 15 times of the par value showing immense confidence of investors in the enterprise.
The PER is 2.4 times of its EPS. The company declared dividend at Rs 2.50 per share similar to the preceding year's.
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Performance Statistics (Million Rupees)
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30 September 2003 2002
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Share Capital-Paid-up: 5.00 5.00
Unapp. Profit: 66.36 10.34
Shareholders Equity: 71.36 15.34
Surplus on Revaluation of F/A: 81.96 52.09
Subordinated Loans: 28.80 28.80
Other L.T. Debts: 105.32 106.92
Deferred Liabilities: 71.65 34.57
Current Liabilities: 207.68 197.58
Tangible Fixed Assets: 346.60 229.00
L.T. Investments: 2.00 2.00
L.T. Deposits: 1.19 1.61
Current Assets: 216.98 202.69
Total Assets: 566.77 435.30
Sales, Profit & Pay Out
Sales: 643.90 510.31
Gross Profit: 101.72 71.14
Operating Profit: 81.68 52.18
Other (Loss) Income: (1.17) 10.40
Financial (Charges): (27.65) (32.78)
(Depreciation): (24.76) (24.40)
Profit Before Taxation: 49.28 28.11
Profit After Taxation: 31.31 20.86
Proposed Dividend Cash
@ Rs 2.50/share: (1.25) (1.25)
Earnings Per Share (Rs): 62.63 41.73
Share Price (Rs) Dated 05.01.2004: 148.20 -
Financial Ratios
Price/Earning Ratio: 2.37 -
Book Value Per Share: 142.72 30.68
Price/Book Value Ratio: 1.04 -
Debt/Equity Ratio: 37:63 52:48
Current Ratio: 1.04 1.03
Asset Turn Over Ratio: 1.14 1.17
Days Receivables: 53 67
Days Inventory: 48 63
Gross Profit Margin (%): 15.80 13.94
Net Profit Margin (%): 4.86 4.09
R.O.A. (%): 5.52 4.75
R.O.C.E. (%): 8.72 8.77
Plant Capacity & Production (Million Kgs)
A) After Conversion 20/s Count Yarn
Installed Capacity: 5.372 5.372
Actual Production: 7.108 5.987
Capacity Utilization (%): 132.31 111.45
B) Number of Spindles
Installed/Worked: 19,200 19,200
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COMPANY INFORMATION: Chairman: Anwar Ahmed Tata; Chief Executive Officer: Shahid Anwar Tata; Company Secretary & Chief Financial Officer: Farooq Advani; Registered Office: 8, 8th Floor Textile Plaza M.A. Jinnah Road Karachi; Factory: A/12, S.I.T.E. Kotri (Sindh)