SKNL, a pioneer in manufacturing and distributing branded textile and ready to wear clothing, announced its results for the quarter ended 30 June 2008.
Commenting on the performance in Q1 FY2009 Mr. Nitin S. Kasliwal, Managing director and Vice Chairman of SKNL said,
“We have entered this fiscal year on a strong footing by delivering a healthy result in Q1 FY2009 and successfully completing a PE deal with GIC, the private equity arm of the Government of Singapore Investment Corporation.
GIC has invested Rs. 9,000 million in Reid & Taylor and acquired 25.4% stake in the company. The balance stake of 74.6% will continue to remain with SKNL. Reid & Taylor being valued at Rs. 35,400 million has been tremendously encouraging for the SKNL team.
The investment symbolizes a high level of confidence amongst global investors in our ability to execute and create distinct businesses that have the potential to deliver sustained value. We look forward to pursuing our opportunities for enhanced profitability and growth."
One of our key growth drivers going forward will be the high value fine cotton venture as it is a high margin business and since it requires significant expertise and investment, the sector is characterized by few players.
This business unit's manufacturing facility is set to be commissioned by Dec 2008 and once it is operational this segment should add substantial value as we will export a majority of the fabrics to leading international luxury brands.
We enjoy a good degree of penetration with brands present in a number of socio-economic segments across the clothing industry in India.
Our brands include Reid & Taylor, Belmonte, Stephens Brothers, Carmichael House and S.Kumars. With a wide portfolio of brands and an undiminished appetite for growth we believe our business will continue to deliver superior performances in the future”.
Revenues of the Company in Q1 FY2009 witnessed a healthy increase of 41.1% driven by healthy sales seen across segments of the company especially in the premium fabric and clothing segment
SKNL delivered a healthy operating profit and was successful in maintaining margins even though raw materials costs have risen significantly demonstrating the operating efficiency of the Company
PAT in Q1 FY2009 stood at Rs. 550.9 million": - Interest cost increased by 64.9% to Rs. 276.1 million from Rs. 167.4 million, which is temporary in nature and would reduce with the conversion of warrants issued to Asia Debt Management Ltd.
- Depreciation for the period stood at Rs. 124.3 million
- Tax expense stood at Rs. 287.0 million for Q1 FY2009
Key Strengths: - Highly capable management with several years of experience in the business - Diverse set of brands that offer a varied range of products enabling it to cater to a number of socio-economic groups in the Indian market - Reid & Taylor – premium fabrics and ready-to-wear suiting
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