Precot Mills has recorded a drop in net sales and net profit during the fourth quarter ended March 31, 2006. While its sales for the quarter came down to Rs 57.16 crore from Rs 60.72 crore in the corresponding period of previous fiscal, its net profit fell by 11 per cent to Rs 4.11 crore from Rs 4.66 crore. The fall in turnover and profitability is due to lower yarn and raw cotton prices during the period. The lower raw material price had exerted pressure on price for the yarns produced.
The board of directors had decided to give 60 per cent dividend for the shareholders for 2005-06 (35 per cent in the previous year). The companys net profit for the year ended March 31, 2006 is up 85 per cent at Rs 15.02 crore (Rs 8.1 crore), though its overall sales income marginally fell to Rs 229.92 crore (Rs 238.74 crore).
Meanwhile, Precot Mills has sought the shareholders approval for raising its authorised share capital from the current Rs 6 crore to Rs 9 crore and this would be placed at the annual general meeting to be held on August 9. This is in view of the companys decision to merge with itself Meridian Industries, the unlisted company in the group.
Meridian Industries had posted a net profit of Rs 5.77 crore for the financial year ended March 31, 2006 (Rs 1.5 crore) on a turnover of Rs 71.56 crore (Rs 74.46 crore). The company has declared 40 per cent dividend (20 per cent last year) for 2005-06.
The Precot-Meridian merger proposal, approved by the shareholders of both the companies awaits the High Court approval expected to be through in two months. Since the swap ratio for the merger was fixed at one share of Precot for every two shares of Meridian, the share capital of Precot will go up by Rs 1.5 crore from Rs 5.45 crore.
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| Posted : 7/1/2006 |
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