Britannia's net rises 37%, 1:2 bonus declared
Our Mumbai Bureau
26 MAY
THE board of Britannia Industries today recommended a bonus issue of 1:2. The fact that this will push the equity capital up from Rs 18.6 crore to Rs 27.8 crore sent the stock price crashing from Rs 1,431.9 to Rs 1330. Higher profit expectations from the market following the World Cup hype also put pressure on the stock. The last bonus of 1:2 was declared in March 1990.
The company recorded an impressive 37 per cent growth in net profit for the year ended Ma-rch 31, 1999 at Rs 39.6 crore ($9.3m) against Rs 28.9 crore ($7.3m) last ye-ar. Sales crossed the Rs 1,000 crore mark to Rs 1,030.1 crore ($242.7 m) from Rs 847.8 crore ($214.6 m). The board has recommended a dividend of Rs 5.50 per share compared to last year's Rs 5. Total expenditure rose to Rs 963.1 crore from Rs 800 crore. The jump was attributed to expenditure on industrial restructuring. Interest provision rose to Rs 6.6 crore from Rs 4.9 crore.
Biscuit volumes are up by 16 per cent. This may be attributed to the response to the Tiger range (pitted against Parle Glucose biscuits) and its Cashew Badam variant. Biscuits contributed over 80 per cent to Britannia's turn-over for 1998.
According to company officials, its health range biscuits under the Nutrichoice umbrella (Digestive, Thinlite and Cream Cracker) is doing well. Britannia has recently entered the snacking segment via the Snax range.
The company is consolidating its cheese and dairy whitener business, launching ZipSip, in the flavoured milk market. The response to this product has been encouraging, it claims.
According to analysts, the company's margins have expanded owing to a reduced adspend. “Sales are only slightly better during an otherwise lean season,” said an analyst. Britannia has undertaken a Rs 21.8-crore capital expenditure as part of it on-going industrial re-structuring plan to upgrade manufacturing facilities to focus on new technology and modern packaging systems. Up to March 31, 1999, Britannia has spent Rs 1.4 crore on making its internal operations Y2K-compliant.
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