Monday, May 06, 2024
Apex Footwear Limited, a subsidiary of Apex Group, posted a 20.85 per cent increase in profit in the financial year 2022–23 defying the ongoing economic crisis and high inflation.
Following this stellar business, the listed company’s board of directors recommended a 35 per cent cash and 10 per cent stock dividends for the year that ended on June 30 this year.
As per its financial statements, the publicly traded company’s profit rose to Tk 16.71 crore in FY23 from Tk 13.83 crore in the year before.
The footwear manufacturer reported earnings per share of Tk 12.86 for 2022–23, which was Tk 10.64 in the previous year.
The company’s net asset value (NAV) per share rose to Tk 239.64 in FY23 from Tk 229.96 in FY22 while the net operating cash flow per share (NOCFPS) slipped to Tk 27.23 last fiscal year from Tk 29.94 one year ago.
According to a disclosure published on the bourses on Wednesday, its annual general meeting (AGM) will be held on November 28 through a digital platform, and the record date has been fixed for October 18.
Apex Footwear reported an impressive financial progress in the first half of the fiscal year 2022–23, with a revenue surge of 41.5 per cent year-on-year and a net profit jump of 41.0 per cent.
The maker and seller of footwear and accessories registered Tk 6.7 crore in net profit in H1 of FY23, while its revenue stood at Tk 801 crore during the period.
The growth was primarily driven by the export receipts, which accounted for 51.7 per cent of the company’s consolidated revenue in July-December of FY23, as per a report prepared by EBL Securities.
Such a stellar export growth was possible due mainly to the initiation of its footwear exports to GU, a shoe brand of Uniqlo-Japan, and the higher conversion rate of the US dollar against the domestic currency, the report read.
On the domestic front, alongside its own brands, the company has been outsourcing and selling footwear and accessories from different foreign brands in its local outlets, which has also helped progress its business.
Shares of Apex Footwear rose 3.95 percent to Tk 307.90 each on the Dhaka Stock Exchange on Wednesday.
The maker of footwear products, according to the EBL Securities report, was currently mulling expanding its production capacity, and in line with the move it decided to purchase 5 acres of industrial land in the Sirajganj Economic Zone for capacity expansion.
Once the expansion plan is implemented, it will increase the firm’s consolidated revenue and profit in the years to come.
Apex Footwear is one of three Bangladeshi companies certified by the Leather Working Group, the world’s most recognised certification for responsible leather sourcing.
This recognition might allow the company to have an opportunity in attracting foreign buyers and charging a comparatively higher price for its products in the global market.
According to the EBL Securities report, while the company has immense potential to achieve higher revenue and profit growth in non-leather footwear export, there are also concerns regarding the company’s debt-to-equity ratio, which stands at 5.26 times as on H1 of FY23.
Additionally, its profitability margins are lower compared to its listed peers, due mainly to higher operating expenses and interest expenses.
Despite these challenges, the company is expected to continue its export growth momentum in the coming years because of the policy supports awarded by the government, the EBL Securities report said.
The government planned to raise the leather export earnings to $10-12 billion by 2030, and to realise this goal, the government has been providing a 15 per cent cash incentive to the leather exporters.
Moreover, its growth momentum in the local market is also expected to continue, as it started manufacturing and marketing export-quality shoes at reasonable prices for rural customers.
Apex Footwear is a leading developer, manufacturer, and retailer of quality footwear, operating in all major export markets in Europe, North America, and Japan, as well as in the domestic market in Bangladesh.
The company was incorporated in Bangladesh in January 1990, and is listed on both stock exchanges in the country. Apex is the largest shoemaker in South Asia, responsible for approximately 15 per cent of leather footwear exports from Bangladesh.
It has 135 global customers and 260 own sales points across the country. The company has been listed since 1993.
