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Generation Next Fashions Limited, a publicly traded company in the textile sector, registered a meagre profit of Tk 49 lakh in FY22 amid soaring cotton prices in the international market.
Cotton prices have nearly doubled during the previous fiscal year. According to Generation Next Fashions Company Secretary Mohammed Shahjahan, the amount of cotton that could be bought for $3, is now going for $5.50.
“Had it not been for the rise in the price of cotton, there would have been scope for a higher rate of dividend,” he said.
Previously, the company had said that no dividend would be paid to the shareholders in such a situation. However, at the annual general meeting held on December 12 this year, shareholders demanded the payment of a one per cent dividend.
Later on Sunday, in a filing posted on the website of the Dhaka Stock Exchange (DSE), the company said the board of directors and shareholders of the company have approved a 1 per cent cash dividend instead of the earlier declared no dividend for the year ended June 30, 2022.
Mohammed Shahjahan said it would not be possible to pay a dividend with the profit made by the company in FY22. For this, they need to collect about Tk 5 crore, he said.
He also said that the decision to pay the dividend was made mainly for the benefit of the investors.
The company is currently trading in the ‘Z’ category. As a result of paying a one per cent dividend, the company will subsequently be traded in the ‘B’ category.
Earlier, on October 30, the company announced no dividend. It reported Earnings per share (EPS) of Tk 0.01, Net Asset Value (NAV) per share of Tk 11.91, and Net Operating Cash Flow Per Share (NOCFPS) of Tk 0.02 for the year ended June 30, 2022, as against Tk 0.01 (restated), Tk 11.91 (restated), and negative Tk 0.21 (restated) for the same period of the previous year.
In the company’s last financial statement, Generation Next Fashions Chairman Tauhidul Islam Chaudhury said, “The global economy is currently facing recession due to Covid-19 and the ongoing Russia-Ukraine war. As a result, many apparel traders and brands went on shutdown.
“Many of our orders have been either cancelled or postponed. This has caused a huge negative impact on the business of ready-made garments suppliers all over the country.”
The company's sponsors and directors jointly own 13.82 per cent shares of the company while institutional investors own 23.07 per cent and general investors 63.11 per cent.
Generation Next Fashions turned a TK 49 lakh loss in the first quarter (July-September) of the fiscal year 2022-23. The company had a net loss of Tk 2.47 crore in the same period last year.
