Timex Group India (500414) Q4 06/07 earnings summary

Executive summary

• FY07 revenue reached Rs. 117.50 crore, up 17% YoY; net profit was Rs. 2.52 crore, up 119% YoY.

• Back-end restructuring, The Time Factory retail expansion and improved operations supported profitability; the new Baddi facility began production in April 2007.

Financial highlights

• Income was Rs. 1,175,055 thousand in FY07 versus Rs. 1,012,902 thousand in FY06; profit before tax was Rs. 32,053 thousand versus Rs. 16,585 thousand.

• Profit after tax increased to Rs. 25,196 thousand from Rs. 11,501 thousand; FY07 tax provisions included Rs. 5,736 thousand fringe benefit tax and Rs. 1,121 thousand minimum alternate tax.

• Net sales were Rs. 1,082,284 thousand after excise duty; total income was Rs. 1,158,668 thousand, including a prior-year revenue grant of Rs. 68,100 thousand not repeated in FY07.

Outlook and guidance

• Plans called for doubling The Time Factory network from 45 stores within 12 months and expanding fashion-watch brands in India.

• Indigenizing imported fast-moving styles, consolidating operations and the new facility were expected to improve operating margins in coming years.

• Management anticipated stable or stronger rupee conditions and no further increase in interest rates; it planned to offset incremental levies through cost savings and efficiency improvements.