. .



A weekly review of fundamentals enjoyed by the blue chips

By SHABBIR H. KAZMI
Updated Oct 23, 2000

As expected the market remained directionless but some selling pressure was witnessed due to higher Badla rate. In the absence of any good news on IMF and HUBCO fronts, rumour mongers will continue to push the market in either direction. The news regarding resignations/change in ministries may further delay the announcement of much awaited Textile Vision 2005.

Some external factors, i.e. high crude oil price, delay in getting funds from the IMF and tension in the Middle East, are expected to have an adverse impact on the earning potential of listed companies. Interest rates have already started moving up and enhanced GoP borrowing may further accelerate the hike.

ESCORTS INVESTMENT BANK

Escorts Investment Bank has released financial results for the year ending June 30, 2000 and also announced 5 per cent dividend. The Bank had paid 10 per cent dividend for the year 1999. Total income for the year 2000 was reported at Rs 94.6 million as compared to that of Rs 89 million for the previous year. The increase was mainly due to a profit of Rs 3.77 million on sale of investments, which also helped in reducing financial charges substantially. Operating income before provision and taxation for the year 2000 has been reported at Rs 14.5 million as against Rs 21 million for the previous year. While the Bank did not make any provision against doubtful Morabaha financing for the previous year, an amount of Rs 2.45 million was transferred to this head during the year 2000. The earning per share for the year 2000 came to Rs. 0.407.

LAWRENCEPUR WOOLLEN & TEXTILE MILLS

Despite reduction in sales, from Rs 259 million for the previous year to Rs 245 million for the year ending June 30, 2000, the Company was able to maintain its gross profit level due to an effective control on cost of sales. While there was an increase in financial and other charges, other income for the year 2000 has been reported at Rs 5.5 million other income for the year 1999 was Rs 880,171 only. Financial and other charges went up from Rs 4 million for the year 1999 to Rs 5.9 million for the year under review. The efforts by the management enabled the Company to declare 30 pert cent dividend to ordinary shareholders higher than the percentage paid for the previous year. Dividend paid to preferred shareholders amounted to Rs 2.3 million.

WORLDCALL PAYPHONES

The Company has released financial results for the year ending June 30, 2000, registering substantial growth in operating profit from Rs 65 million in 1999 to Rs 124 million for the year under review. Other income of the Company jumped from Rs 2.2 million for the previous year to Rs 16.38 million for the year 2000. The Company did not declare any dividend and has proposed to issue Bonus shares amounting to Rs 10 million, subject to the approval of the SECP. The Company had also issued Rs 55 million Bonus shares from the earnings of the previous year. It appears that over the years the Company has been retaining the earnings to expand its payphones network.

DYNO PAKISTAN

Due to higher turnover of the Company, operating profit increased to Rs 27.462 million for the year ending June 30, 2000 as compared to that of Rs 23.170 million for the previous year. Despite an increase in turnover, the Company was able to reduce financial and other charges from Rs 15.9 million for the previous year to Rs 8.684 million for the year under review. While other income increased there was nearly 50 per cent increase in dividend income from subsidiary company. Out of the income for the year, the Board of Directors have proposed to pay 23 per cent dividend and issue 30 per cent bonus shares. The Company had paid 27.5 per cent dividend for the previous year.

PAK-APEX LEASING

Based on its financial results for the year ending June 30, 2000 the Company has announced 13.5 per cent dividend. The Company had paid 12.5 per cent dividend for the year 1999. While there was increase in revenue, there was more than corresponding increase in expenditure during the year under review mainly due to increase in financial charges and general and administrative expenses. The Company had announced 100 per cent Right issue at a discount of 20 per cent. The issue was fully underwritten by Khadim Ali Shah Bukhari. According to the latest information, the subscription received against Right Issue amounted only Rs 10,426,400 and the unsubscribed shares amounting to Rs 69,573,600 will be picked up by the underwriter.

NATIONAL FOODS

Despite a considerable reduction in net sales, the Company was able to contain a substantial reduction in profit before tax. The efforts of the management are visible from reduction in administrative expenses, selling and distribution expenses and financial and other charges. Still the Company managed to pay only 11.5 per cent dividend to its shareholders last year 24 per cent dividend was paid.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

TURNOVER
 (SHARE MN)

CLOSING 
PRICE

PTCL

24.45

24.30

85,449,000

24.30

Hubco

18.65

17.70

207,620,000

17.80

Fauji Fertilizer

38.80

36.80

11,874,900

36.90

World Call

20.05

19.70

3,842,000

19.70

Dyno Pak

13.25

12.90

72,500

13.00

Pak Apex Leasing

7.50

7.00

7.00

National Food

29.00

29.00

29.00

Source IP Securities