KARACH: Gul Ahmed Textile Mills, one of Pakistan’s biggest mills, planned to spin off the retail business ‘Ideas’ paving a way for its public listing in near future, the company said on Tuesday.
In an analyst briefing, the company management said it is carving out its retail segment, Ideas, to enable it to be a 100 percent-owned subsidiary subject to the court’s order.
The management is aiming for its initial public offering between November 2021 and March 2022 depending on the market conditions, Khadmi Ali Shah Bukhari Research Securities Research said in report.
With an installed capacity of more than 51,840 spindles, 300 state-of-the-art weaving machines and most modern yarn dyeing, processing and stitching units, Gul Ahmed Textile is a composite unit – making everything from cotton yarn to finished products.
The company has 108 retail stores in 45 cities across the country, offering a diverse range of products from home accessories to fashion clothing. The company plans to expand its retail presence by adding 20 new stores this year.
Despite COVID19 the retail segment has contributed 20 percent towards the turnover mainly attributed to spill-over of orders and the segment is expected to see higher growth as vaccine has started to rollout, according to the company. Within textile composite, the company posted the highest revenue of Rs63.5 billion and gross profit of Rs12.3 billion.
The company posted profit after tax of Rs1.7 billion in 3QFY21 as against a loss of Rs370 million. The profitability is attributed to higher demand due to shift in orders to Pakistan from regional peers amidst supply chain disruptions.
Textile exports from Pakistan increased nine percent to $11.35 billion in the July-March period, according to the Pakistan Bureau of Statistics (PBS) data.
“We expect the company’s expansion in all of its major segments to reap profits on a sustainable basis in the future,’ KASB Research said.
Home textile continues to drive the top-line of the company whereas apparel and garment segments have remained laggards because of sluggish demand during pandemic.
The company continues to invest Rs5 billion every year towards capacity expansion (Rs3 billion) and balancing modernisation and restructuring activity (Rs2 billion) using long term financing facility to achieve optimal level of return on assets. Its brand is recognisable in more than 44 countries.
Gul Ahmed also has its own captive power plant comprising of gas engines, gas & steam turbines, and backup diesel engines.
Believing in playing its role in protecting the environment, the company has also set up a waste water treatment plant to treat 100 percent of its effluent.