By: Alfalah Securities Limited
Al-Shaheer Corporation Limited reported FY15 earnings of PKR197mn against PKR68mn last year resulting in a growth of 191%. Gross profit margin clocked in at 16.5% on the back of expansion in high margin retail segment. Meat One brand, catering to the high end consumers, added ten more retail outlets taking their total to 24. In addition to this, a one-time tax reversal of PKR29mn also supported the profitability. Although the company reported an EPS of PKR3.25, after adjusting the EPS for new shares post listing, FY15 EPS drops to PKR2.15.
The company aims to achieve PKR50bn revenue by 2025 (FY15 revenue of PKR5bn) and intends to open 175 Meat One and 500 Khaas locations by 2025. An MoU has also been signed with Canteen Stores Department (CSD) allowing ASCL to make most of the CSD retail network by setting up new Khaas outlets. Moreover, the company is seeking to reduce their dependence on exports and focusing more on local retail and B2B markets in the coming years. Various expansion projects are on the cards as the company looks to vertically integrate and expand into new businesses. Feedlot fattening farms with a capacity of 4000 large animals per year will come online by Nov-15 while the company is also looking to shift towards the live animal collection model. Multan and Islamabad slaughterhouses are expected to come online before Qurbani season in 2016. On the other hand, a vertically integrated poultry plant and vegetable based ready to cook product line are likely to start production by 2017.