Britannia Industries (BRITANNIA) Q4 97/98 earnings summary

Executive summary

• FY98 sales rose 13% to Rs 8,478m; operating profit increased 54% to Rs 360m and net profit rose 62% to Rs 289m.

• Earnings gains reflected higher sales, cost savings, productivity gains and effective treasury management despite a weak economy.

Financial highlights

• Revenue Rs 8,478m vs Rs 7,523m; PBT Rs 424m vs Rs 295m; PAT Rs 289m vs Rs 179m.

• Operating profit before depreciation Rs 478m vs Rs 306m; depreciation Rs 118m vs Rs 73m; operating profit Rs 360m vs Rs 233m.

• EPS Rs 15.58 vs Rs 9.63; proposed dividend Rs 5/share, with total dividend and tax payout of Rs 102.1m.

• Cash flow generation increased 68% to Rs 436m; shareholders’ funds rose 18% to Rs 1,211m.

Outlook and guidance

• Focus on lower-cost production without compromising quality, through modern process equipment, advanced packaging, quality improvement and new product development.

• Management expected renewed focus on cakes, including the new Half/Half product, to support appreciable volume growth in the coming year.

• Core bakery consolidation and dairy growth supported an optimistic outlook; further performance improvement targeted amid intense competition.