In addition, the marketing team also deserves encouragement as the trade debts were relatively low. The company emphasised that it manages the credit risk through having exposures only to those parties, which were considered to be creditworthy, obtaining security deposit wherever possible. Its net profit after taxation marginally declined but cash dividend substantially improved and cash dividend is the highest since 1999.
Clover Pakistan Ltd is one of the constituent members of a large conglomerate which has diversified interest in food and personal care products, insurance, real estate, McDonald franchise chain, paper and board, cigarette and tobacco. The company was incorporated in the province of Sindh on September 30, 1986 as a public limited company. The registered office of the company is situated at Lakson Square Building No 2 Sarwar Shaheed Road whereas its factory is located in Hub Industrial Estate Balochistan.
The principal business of Clover Pakistan Ltd is manufacture and sale of food and plastic products and trading in food and personal care products.
The directors, their spouses etc own 18.58% of company's total 5.46 million paid up shares of Rs 10 each. Its five sister companies' shareholding aggregates to 30.9% of its equity. These companies are Siza Private Ltd, Siza Services (Pvt) Ltd, Siza Commodities (Pvt) Ltd, Premier Fashions Pvt Ltd and Century Insurance Company Ltd.
During July-June 2003-04, the company produced food products worth Rs 3.388 million rupees registering 8.2% increase over output worth Rs 3.13 million and achieved 145.16% of the capacity which is commendable. In plastic products the rate of increase in output was 19.5% and capacity utilisation exceeded the rated production capacity by 13.3%.
The net sales revenue of the company was recorded at Rs 517.63 million as against Rs 493.26 million last year showing marginal increase by 4.94%. The modest rise in sales appears to be satisfactory judging the fierce competition from its rivals both existing and new brands of powder beverages.
The contributory factor in the growth was giving increased discounts to the trade, which was necessary to match those offered by the competitors. Spending on advertising and sales promotion have been the key factor that continued to build sales. The advertising expenses escalated to Rs 64.21 million from previous year's expenses of Rs 44.51 million registering an increase by 44.3%. Selling and Distribution costs increased by 24% on sales promotion and improving and streamlining the sales network.
In addition, the company has been re-organising and expanding its warehousing facilities throughout the country. The company also increased personnel in the sales force and field staff. The prime product of the company is Tang brand of various flavours and in various size of packages including saches.
In one of the advertisement the veteran film star Nadeem has been shown promoting Tang Hajj Scheme. In the other, the Tang's advertisement emphasises the mother's preference of this beverage.
The other effective medium of sales promotion was Tang promotion stalls. The single product strategy of the company is not fully effective. Accordingly, the leadership in the company envisages to add further lines of production facilities. In addition the company hopes to upgrade its popular line of products.
The company's Gross Profit increased by 9.6% to Rs 231.04 million (FY 2002-03: Rs 210.83 million) which shows higher growth rate than sales revenue. By looking at the gross margin which marginally improved, one can say that the gross profit increased because of increase in volume of sales and gross margin.
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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: 54.60 39.00
Reserves & Surplus: 85.77 60.93
Shareholders Equity: 140.37 99.93
L T Debts: 0.70 1.81
Deferred Liabilities: 2.50 -
L T Deposits: 1.67 1.26
Current Liabilities: 145.76 132.48
Tangible Fixed Assets: 48.51 41.62
L T Loans: 1.13 0.86
L T Security Deposits: 0.81 0.98
Current Assets: 240.55 192.02
Total Assets: 291.00 235.48
Sales, Profit & Pay Out:
Net Sales: 517.63 493.26
Gross Profit: 231.04 210.83
Other Income: 1.38 1.25
Operating Profit: 97.36 104.44
Financial (Charges): (1.12) (1.71)
(Depreciation): (5.91) (4.75)
Profit Before Taxation: 96.23 102.73
Profit After Taxation: 65.02 69.13
Earnings Per Share (Rs): 11.91 12.66
Dividend Cash @ Rs 4.50/Share
(2003: @ Rs 3/Share): 24.57 11.70
Share Price (Rs) Dated 01/02/05: 92.00 -
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Financial Ratios
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Price/Earning Ratio: 7.72 -
Book Value Per Share: 25.71 25.62
Price/Book Value Ratio: 3.58 -
Debt/Equity Ratio: 0:100 2:98
Current Ratio: 1.65 1.45
Assets Turn Over Ratio: 1.78 2.09
Days Receivables: 15 18
Days Inventory: 111 93
Gross Profit Margin (%): 44.63 42.74
Net Profit Margin (%): 12.56 14.01
R O A (%): 22.34 29.35
R O C E (%): 44.77 67.11
Plant Capacity & Production
A) Food Products (Million Rupees):
Installed Capacity: 2.334 2.334
Production: 3.388 3.130
Capacity Utilization (%): 145.16 134.10
(B) Plastics Products (000 Rupees):
Installed Capacity: 27.00 27.00
Production: 30.58 25.58
Capacity Utilisation (%): 113.26 94.74
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COMPANY INFORMATION: Chairman: Iqbal Ali Lakhani; Advisor: Sultan Ali Lakhani; Chief Executive: Zulfiqar Ali Lakhani; Director: Tasleem Uddin Ahmed Batlay; Company Secretary: Ramzan Ali Halani; Registered Office: Lakson Square Building No 2 Sarwar Shaheed Road Karachi-74200; Web Address Not Reported; Factory: B-182 Hub Industrial Trading Estate Hub District Lasbella.