its transmission of shares from NRI to promotor.
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Bad result by premco. RM cost increased due to crude and they couldn’t pass it on as due to supply to OEM their is usually lag of few months to pass on.
Also employe cost increased due to more sales & mkting guy employed
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Good example of management not walking the talk. Crude is still much low compared to historic levels. Last AGM they talked about successfully negotiating price contracts only to end up in deep red.
3 Likes
Results are out… Thank God not a loss this time
Dividend 2 per share
cost of RM has increased and looks like not able to pass on as they supply directly to company in long term contract. will get more clarification only in AGM
Is there anyone who is still holding it, please through light on current situation and thoughts, does it make sense to still hold it or book losses
I feel there is no option than to hold it…
Dividend yield is looking good at CMP
Has bottomed out… (Looking at history of company and promoters I don’t think it deserves less than 30 crores in mcap…
Textile as a sector is facing issues (you can check Ambika cotton as well)
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I continue to hold, unfortunately. Nos have been terrible and I got it wrong!
The only saving grace is that the co doesn’t has leverage…infact they have surplus cash. Lets see if they can get their act together and recover back.
7 Likes
I too continue to hold. I had actually Increased my stake when the company reported a one off good result 2 quarters back thinking that the Vietnam operations has turned around. But it seems their Indian capacities are suboptimally utilised after shifting of some of Indian operations to Vietnam. Will review this after results
2 Likes
I continue to hold sadly with the only hope that company will come out of this dismal business performance assuming management is genuine and books are not fudged. Also, dividend yield of ~4% gives some solace.
Results are good… Light at end of tunnel…
Standalone business remains subdued but consolidated one is doing good…
Consolidated net profit of 1.18 crores after one time finance costs of 29L and additional inventory build up of 3 crores…
Important highlight
Due to higher demand for Knit Products, Campany‘s product mix changed. This also resulted In higher raw material cost. The Company hopes
to be able to maintain its growth momentum with higher demands for Its products & improved prodcuct line with concentration an KNIT as well
WOVEN Products.
Looks like company is seeing demand coming
4 Likes
Premco Global FY19 Annual Report Notes
- Consolidated basis, revenue from operations stood at Rs. 7,212.41 Lacs as against Rs. 8,136.64 Lacs in the previous year and Net Profit after Tax stood at 309.53Lacs as compared to the Net Profit after Tax of Rs. 540.88Lacs during the previous accounting year.
- The Company’s Consolidated EBDIT for the year stood at Rs. 802.48Lacs as against Rs. 1092.09Lacs, The Consolidated Profit after Tax of the Company Stood at Rs. 309.53Lacs as against Rs. 540.88Lacs.
- On the Consolidated basis, Company’s other operating revenue was lower by 67.02 % (Rs. 145.77 Lacs) due to lower duty drawback incentives post GST era w.e.f. 01.10.2017. Company has since revised the export prices to cover the cost. The Company was able to pass on the lower duty drawback effect due to reduction in Rates to export customers, thereby improving the RM Consumption to Sales ratio by 3.36 %.01.10.2017.
- The Company exports were lower by 8.23% i.e. (Rs. 388.01 Lacs). This was on account of lower sales to one of our large customers , as well as depressed market for all textile products due to poor retail sales globally.
- Extraordinary item includes expenditure of Rs. 106.56 Lakhs booked towards reversal of GST credit on inventory held as on date of implementation of GST law i.e. Rs. 82.25 for Trans 1 credit (01.07.2017) & Rs. 24.31 for in-advert credit ( 01.08.2018).
- Company’s GrossMargins improved substantially from 46.54% to 53.80% ensuring net saving of Rs. 503.71 Lacs.
- Also Employee cost increased by Rs 173.20 Lacs as compared to previous year, which was on account of new recruitment in the Marketing division , which would strongly focus on new Markets, and building business with big brands Internationally and in India .Also Vietnam Plant was run at Higher Capacity as compared to previous year resulting in Higher Employee cost incurred at Vietnam.
- On standalone basis Domestic sales were lower by 10% (Rs. 295.98 Lacs) as compared to previous year. The decline was mainly on account of Lower domestic demand due to floods in Central & Southern part of India.
- On standalone basis The Company exports were lower by 23% i.e. (Rs. 713.94 Lacs). This was on account of lower trading activity with company’s own subsidiary & lower sales to one of our large customers.
- PGVL Vietnam was able to develop and & procure supplies locally, thereby reducing the Raw Material sourcing from India.
- Forex earned Rs. 23.54 cr ( Rs. 30.68 cr in FY18).
- Invested Rs230.85 Lacs in Capital expenditure for modernizing the Indian Operations.The areas of expenditure include modernizing of warehousing at Dadra factory and an increas ein automation of its other Plants as well.
- In 2018-19, Company received SINGLE STAR EXPORT HOUSE CERTIFICATE, which will enable ourcompany to be recognized for ease of operation with tax and banking officials.
- The Company’s Vietnam Operations caters to large global orders. In the ensuing year ,It expects to achieve 90% capacity utilization (75% in FY19), thereby improving profitability and margins.
- Company expects and targets to achieve a targeted growth of 10 to 15% next year.
- Plant Locations
- Plot No. -41, Diwan & Sons Industrial Estate, Aliyali Village, Dist.Thane, Palghar, Maharashtra.
- Plot No. -202/2, Old Check post, Dadra & Nagar Haveli, Union Territory.
- C/O. Akay Filtips Pvt.Ltd. Plot No.-2/23/24, GIDC, Silvassa Road, Near Nathani Paper Mills, Vapi-396 195.
- 8, Marol Udyog Premises, Steelmade Industrial Estate, Marol-Maroshi Road, Andheri (E) Mumbai – 400 059. 9)
- Foreign Subsidiary Lot No 18 - 20, Road No 7, Tan Duc Industrial Park, Duc Hoa Ha, Duc Hoa, Long An Province, Vietnam.
- Liquid Investments and cash balance totals Rs. 14.9 cr. Negative Operating Cash Flows of Rs. 2.13 cr for the year due to high inventory buildup of finished goods. Inventory days deteriorated from 76 days in FY18 to 115 days in FY19.
Regards
Harshit
Disclosure: Tracking
6 Likes
Is there any one who’s planning to attend the AGM on Sep 10th? If so, please share the notes after attending.
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Did any one attend the AGM?
If so, please share the notes here.
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I attended… I will note down what I remember by some days
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AGM of Premco was very silent and peaceful… No one was interested in knowing anything on business updates…All uncle and aunties had come just to have free snacks and savouries…of Hotel Tunga in Andheri… So nothing happened officially as a part of AGM in terms of discussion… And trust me AGM meeting was officially over in 15 mins …only snacks part was left…
But we got hold of management in background (few of them who were really there for updates)
Below are highlights
On Vietnam
- Company is doing well in Vietnam and they were able to achieve expected growth there.
-Their relationship with Hanes remain good and they may undergo expansion on Vietnam in coming years (2-3 years). - For expansion no debt will be taken and would be done through internal accruals (Thing I like about management, they are good at managing money and they take debt only when cost of debt is less than what they will earn from the cash they have)
For domestic business
- This played out really bad this year and indian slowdown has affected them badly.
- Market players were not ready to pick up stock due to lack of demand which resulted into high inventory levels at end of year
- Management sees demand is picking up since last few months and can expect better numbers
- Lux and other local players remain their customers (there was some discussions with Jockey but they have not got the deal yet)
- Good news is company has stuck some good deal with Bangladesh’s largest player and they may use Indian inventory for the exports in Bangladesh , Sri Lanka and Nepal
I have personally not researched on these markets according to size but management was confident they have good size their.
Adding to @HIMSHAH, management does have good sense of their own sector and business and in long term there is no doubt they will do good. But last year was not in control (not only Premco but all textile players)
Disclosure : All points are discussed in a group at AGM and nothing is in public domain. Believe at your own risk.
9 Likes
Best part of company is very good honest management and clean balance sheet.
Bad part is small company with 80 cr sales. Slight changes in margin can make or break as very small capital and it immediately reflect in EPS.
Company had tough times in past two years as export incentive has come down from 11.5 % to 1.5 %. Also raw material price had gone up with rise in crude price. They already had contract of supply with buyer and they were unable to pass on full cost increase. They are renegotiating price in renewal of contracts.
They are also trying different product mix and raw materials so cost can be controlled in future.
On present date they have around 30 crs cash investment which is 100 rs per share approx and shares available at around same value.
Disc.I am invested and tracking it since long time.
6 Likes
Numbers are good…
Cash Position is turning good with 12 crore cash and cash equivalents.
Company’s Sales increased by 40 % as compared to quarter ended September 2018. Margins were healthy due to higher efficiency achieved by Vietnam plant and better prodcut mix.
Company achieved a margin of 309.00 Lakhs as compared to 139.12 Lakhs of September 2018 quarter
Results are up QoQ too.
7 Likes
Hello, How did you calculate the 30 cr cash investment. The balance sheet of March 19 shows 14cr investment and 2.8 cr in bank. Is it based on some new data in the latest quarterly results?