The marketing team of the company has revitalised its brands both in the rural and urban sectors. Resultantly its various brands have occupied the shelfs prominently in the diversified retail environment. This has borne fruit and enabled the company to continue growth momentum.
The Annual Report 2006 of the company records Compound Annual Growth Rate (CAGR) for the last three years at 21.28%, CAGR for five years at Rs 21.57% and CAGR for 10 years at 20.30%.
The Annual Report also emphasized that associating brands with consumer's aspirations has ensured profitable growth in the past 25 years for Colgate and its shareholders. During the year under review the company posted net profit at Rs 498.86 million (FY 2004-05: Rs 302.97 million) registering 65% growth over previous year's. Financial health of the company remained robust as evidenced from financial ratios appended below.
Colgate-Palmolive (Pakistan) Limited (CP) was initially incorporated in Pakistan on December 5, 1977 as a public limited company with the name of National Detergents Ltd. The name of the company was changed to Colgate-Palmolive (Pakistan) Limited on March 28, 1990 when the company entered into a Participation Agreement with Colgate-Palmolive Company USA.
Colgate-Palmolive (Pakistan) Ltd's 30% stock is owned by Colgate-Palmolive Co USA, whereas 20.23% of its stock is held by Deutsche Bank International Limited. Together, these foreign shareholders own majority shareholding of 50.23%.
The Lakson Group of Pakistan also have sizeable shareholding beside having management control. The company's Pakistani directors and members of their family own 17.84% of the company stock. In addition, the associated undertakings of Lakson Group own 20.99% of the company's stock.
In the seven members Board of Directors of the company there are two foreign nominee directors while remaining members are Pakistani directors. At the apex of the Board is the chairman Iqbal Ali Lakhani while Chief Executive of the company is Zulfiqar Ali Lakhani.
The company is listed on the Karachi and Lahore Stock Exchanges. On September 7, 2006, the closing price of its share was recorded at Rs 435 per share which is more than 43 times of the par value. It is a blue chip company and commands invariably very high price. During the last one year, its share price ranged between Rs 175 and Rs 462 per share.
Apart from being part of a large Pakistani Conglomerate at the same time of a large US multinational company, the cogent reason of its highly priced share is its excellent track record of profit distribution. For the financial year ended June 30, 2006, (FY 2005-06) the directors recommended cash dividend @Rs 16 per 10-rupee share and bonus stock dividend @25%. According to the six-year statistics published with the Annual Report 2006, during last six years the company did not skip dividend and average annual cash dividend works out to 90%.
The company's net turnover has been steeply trending upward during last six years. During FY2005-06, the company's net turnover amounted to Rs 5.06 billion as compared to Rs 3.920 billion posted in the same period last year (FY2004-05). The turnover's growth rate of 27.7% is quite impressive while the amount is highest in the company's history.
The company is primarily engaged in the manufacture and sale of detergents, personal and other related products. CP's brands, in four core categories include household names like Colgate Toothpaste, Express Power Washing Powder, Max Bar, Palmolive Soap, Bonus Tristar etc. The year under review saw the company's concerted effort of developing new variants and featurism its brands duly supported by strong advertising campaign.
At the same time Colgate's trade marketing teams met with key account outlets nationally to initiate various activities to strengthen this valued relationship.
This is strategically helping the company, improve distributive efficiencies, build customer relationships and better shelf space of the company's brands in various retail environments.
The company emphasizes that Bonus Tristar is the largest selling washing powder in Pakistan. Lemon Max Bar Dish Wash Bar is the driving force behind strong profitable growth. Express Power's upgraded formulation has revitalised the brand as this includes ingredient which performs better on stain removal and whiteness.
The company pioneered the herbal concept and the launch of Colgate Herbal since 2003 has been well received. Palmolive Naturals Mint and Eucalyptus and Sparkle Brands were revitalised by strong media support and ground promotion campaign.
==========================================================
Performance Statistics (Million Rupees)
==========================================================
30th June 2006 2005
==========================================================
Share Capital-Paid-up: 122.30 122.30
Reserves: 1,175.29 829.31
Surplus on Revaluation
of Investments: 1.37 -
Shareholders Equity: 1,298.96 951.61
L.T. Debts: 9.21 53.85
Deferred Taxation: 99.53 92.00
L.T. Deposits: 3.84 4.06
Current Liabilities: 699.95 436.20
Fixed Assets: 739.28 622.42
Intangible Assets: 23.20 29.00
L.T. Loans: 9.55 6.00
L.T. Security Deposits: 1.98 2.32
Current Assets: 1,337.48 877.98
Total Assets: 2,111.49 1,537.72
----------------------------------------------------------
Sales, Profit & Pay Out
----------------------------------------------------------
Net-Turnover: 5,005.70 3,920.22
Gross Profit: 1,615.21 1,058.38
Other Operating Income: 34.70 8.19
Profit from Operations: 782.64 481.62
Finance (Costs): (13.31) (14.53)
(Depreciation & Amortization): (82.94) (68.90)
Profit Before Taxation: 769.33 467.09
Profit After Taxation: 498.86 302.97
Earnings Per Share (Rs): 40.79 42.77
Dividend Cash (%): 160.00 125.00
Dividend Bonus Stock (%): 25.00 -
Share Price (Rs) on 07/09/06: 435.00 -
----------------------------------------------------------
Financial Ratios
----------------------------------------------------------
Price/Earning Ratio: 10.66 -
Book Value Per Share: 106.21 77.80
Price/Book Value Ratio: 4.09 -
Debt/Equity Ratio: 1:99 5:95
Current Ratio: 1.91 2.01
Asset Turn Over Ratio: 2.37 2.54
Days Receivables: 8 8
Days Inventory: 66 68
Gross Profit Margin (%): 32.27 27.00
Net Profit Margin (%): 9.97 7.72
R.O.A. (%): 23.63 19.70
R.O.C.E. (%): 35.34 27.50
----------------------------------------------------------
Plant Capacity & Actual Production (Quantities in Tons)
----------------------------------------------------------
Capacity: 87,200 74,200
Production: 81,134 62,341
Capacity Utilisation (%): 93.04 84.01
==========================================================
Note: The under utilisation of capacity was due to market constraints.
COMPANY INFORMATION: Advisor: Sultanali Lakhani; Chairman: Iqbal Ail Lakhani; Chief Executive: Zulfiqar Ali Lakhani; Director: Tasleemuddin Ahmed Batlay; Company Secretary: Ramzan Ali Halani; Registered Office: Lakson Square Building No 2 Sarwar Shaheed Road, Karachi 74200; Website: www.colgate.com.pk; Factories: Detergents Soap and Paste G-6 SITE Kotri District Jamshoro (Sindh).