Bata India (500043) Q4 00/01 earnings summary

Executive summary

• FY2001 sales were Rs 7,599.8m; PBT fell to Rs 24.6m from Rs 253.0m and PAT to Rs 39.8m from Rs 156.0m amid subdued demand and higher operating pressure.

• Retail and wholesale turnover increased 1% and 3%, respectively, while markdowns on slow-moving stocks and lower production reduced operating performance.

Financial highlights

• Revenue from sales was Rs 7,599.8m versus Rs 7,601.5m in 2000; other income rose to Rs 125.4m from Rs 11.4m, including an Rs 82.2m gain on fixed-asset disposal.

• PBT was Rs 24.6m versus Rs 253.0m; PAT was Rs 39.8m versus Rs 156.0m. Tax included Rs 17.1m deferred tax credit and Rs 1.9m current tax provision.

• Manufacturing, distribution, selling and administration expenses rose to Rs 3,440.5m from Rs 3,226.1m; interest expense was Rs 90.9m versus Rs 89.1m.

• Proposed dividend was Rs 0.75 per share; capital expenditure was Rs 100.0m versus Rs 128.3m in 2000.

Outlook and guidance

• Priorities include quality, product development, merchandising, working-capital management and cost reduction to improve competitiveness and profitability.

• 2002 launches planned across CHIARA, POWER INTERNATIONAL, ROCKY, WEINBRENNER, ALL SEASONS, Dr. HAWAI and TINO ranges; REEBOK and NIKE footwear also to be marketed in stores.

• Store strategy calls for four formats—Flagship, City, Family and Bazar—to target distinct customer and price segments; weak cash-drain stores may be replaced with agency arrangements.