Dipped Products PLC

 

1.EXECUTIVE SUMMARY

Dipped Products PLC are a global leader in protective hand-wear, serving around 5% of global demand for natural and synthetic-latex based household and industrial gloves. With a track record of over four decades, we have built reputation for innovation, quality and sustainable manufacturing globally. The DPL Group also has interests in Sri Lanka’s plantation sector and producing tea and rubber through its holdings two leading regional Plantation Companies.

The DPL Group is represented by several subsidiaries engaged in the two business lines of hand protection and plantations. In hand protection, the parent entity together with four subsidiaries are involved in the manufacture of medical examination and non-medical disposable gloves, including Dipped Products (Thailand) Limited which engages in the production of medical examination and non-medical disposable gloves.

 

The Group’s consolidated turnover increased by 6% to Rs.30.1 billion during the year, contributed by growth in both the Hand Protection (+8%) and Plantations (+4%) sectors. Despite intense regional competition, the Hand Protection sector grew its pre-tax profit by 66% to Rs.712.15 million, supported by steady rubber prices, client acquisition and focus on productivity initiatives. The Italian based marketing company ICOGUANTI S.p.A also made a strong contribution to the Group’s profitability supported by low input costs and favourable currency movements. The Plantations sector recorded a pre-tax profit of Rs. 930.40 million (+15% growth) mainly due to the recovery of tea prices towards the latter part of the year, although overall performance remained subdued given adverse weather, and an increase in wage rates. Overall the Group’s consolidated pre-tax profit increased by 32% to Rs.1.64 billion while profit attributable to shareholders amounted to Rs. 868.42 million compared to Rs. 495.47 million in the previous year.

 

  

2.ANALYSIS OVERVIEW

DPL is one of the global leaders in hand-ware , serving close to 5% of the global demand for natural and synthetic latex based household and industrial gloves. This report contains a five year comparative financial analysis of companies performance. The analysis is done using the following techniques.

v  Horizontal analysis

ØDollar change

ØPercent change

 

v  Vertical analysis

Ø  Common size percent

 

v  Ratio analysis  

ØLiquidity and Efficiency

·         Working capital

·         Current ratio

·         Acid Test Ratio

·         Accounts receivable turnover

·         Merchandize turnover

·         Days’sales uncollected

·         Days’ sales in inventory

·         Total assets turnover

 

ØSolvency

·         Debt ratio

·         Equity ratio

·         Times interest earned

 

ØProfitability

·         Profit margin

·         Gross margin

·         Return on total assets

·         Return on common shareholders’ equity

·         Book value per common share

·         Basic earnings per share

 

ØMarket                                        

·         Price Earnings per Share

·         Dividend yield

  

 

 

03.EVIDENT MATTER

·         Statement of Financial position year 2015 -2019

Year	2015	2016	2017	2018	2019
ASSETS
Non current assets
Tangible  assets	463161	475894	570746	676108	637484
Formers (moulds)	37164	38328	34438	57648	67363
Investment properties	391993	411700	125500	156900	163176
Investment in subsidaries	3147684	3147684	3682546	3600546	3500546
Amount due from subsidaries	14457	19789	33163	38620	23748
Other non current financial assets
Defferred assets	14457	20744	40960	33163	87230
Current assets
Inventories	370192	361065	486544	605332	711417
Trade and other receivables	720604	767916	1000112	821265	1080365
Advances and pre payments	43605	89433	39639	52655	59535
Amounts due from subsidaries	932561	501123	294186	876255	1266170
Cash and short term deposits	124163	46458	28820	72417	181113
	2191125	1765995	1849301	2427924	3298600
Total assets	6245584	5880134	6339777	6990909	7837332
EQUITY AND LIABILITIES
Equity
Stated capital	598615	598615	598615	598615	598615
Capital reserves	195128	195128	220483	189682	189682
Revenue reserves	2698964	2598221	2843122	3853222	3732466
Equity attributable to equity holders	3492707	3391964	3662220	4641519	4570265
Total Equity	3492707	3391964	3662220	4641519	4570265
Non -current liabilities
Defined benefit obligation	320790	380492	347237	433820	472031
	320790	380492	347237	433820	472031
Current liabilities
Trade and other payable	497010	313066	368543	386272	558051
Interest bearing loans & borrowings	540509	295234	608466	905952	1506303
Amounts due to subsidaries	1394568	1499378	1353311	614229	730682
Income tax payable				9117
Total current liabilities	2432087	2107678	2330320	1915570	2795036
Total liabilities	2752877	2488170	2677557	2349390	3267067
Total equity & liabilities	6245584	5880134	6339777	6990909	7837332

 

 

 

·         Statement of Income 2015-2019

Year	2015	2016	2017	2018	2019
Revenue	2564913	1685401	1792509	2266036	3898365
Cost of sales	1939746	1242316	1381449	1836512	3025141
Gross profit	625167	443085	411060	429524	873224
Other income and gains	575550	191942	420163	261294	240238
Distribution costs	24541	25598	19505	27611	33671
Administrative expenses	369523	424171	404036	452036	621200
Other expenses
Impairment reversal / (loss) on investment and other amounts due	105000	15290	196	208	100406
Finance costs	73840	66880	104961	90484	127298
Finance income	7134	5001	8313	16088	55832
Profit before tax	626272	171299	335749	167967	292995
Tax (expense) / reversal	11217	5760	21182	4635	34772
Profit for the year	615055	177059	356931	163332	327767
Attributable to:
Equity holders of the parent	615055	177059	356931	163332	327767
Non-controlling interest
	615055	177059	356931	163332	327767
Basic earnings per share (Rs.)	10.27	2.96	5.96	2.73	5.48
Diluted earnings per share (Rs.)	10.27	2.96	5.96	2.73	5.48
Dividends per share (Rs.)	7	2	3	3	4.5

 

 

 

 

04.ANALYSIS

Horizontal Analysis

Dollar change=Analysis Period Amount-Base Period Amount

 

Year	2015	2016	2017	2018	2019
ASSETS
Non current assets
Tangible  assets	48407	12733	94852	105362	-38624
Formers (moulds)	-26848	1164	-3890	23210	9715
Investment properties	86024	19707	-286200	31400	6276
Investment in subsidaries	520000	0	534862	-82000	-100000
Amount due from subsidaries	-2210	5332	13374	5457	-14872
Other non current financial assets
Defferred assets	-2210	6287	20216	-7797	54067
Current assets
Inventories	-172139	-9127	125479	118788	106085
Trade and other receivables	-37463	47312	232196	-178847	259100
Advances and pre payments	-7.6E+10	45828	-49794	13016	6880
Amounts due from subsidaries	909887	-431438	-206937	582069	389915
Cash and short term deposits	-1650794	-77705	-17638	43597	108696
	-3012918	-425130	83306	578623	870676
Total assets	92064	-365450	459643	651132	846423
EQUITY AND LIABILITIES
Equity
Stated capital
Capital reserves	16043	0	25355	-30801	0
Revenue reserves	348878	-100743	244901	1010100	-120756
Equity attributable to equity holders	364921	-100743	270256	979299	-71254
Total Equity	364921	-100743	270256	979299	-71254
Non -current liabilities
Defined benefit obligation	23714	59702	-33255	86583	38211
	23714	59702	-33255	86583	38211
Current liabilities
Trade and other payable	-34439	-183944	55477	17729	171779
Interest bearing loans & borrowings	65392	-245275	313232	297486	600351
Amounts due to subsidaries	621953	104810	-146067	-739082	116453
Income tax payable				9117	-9117
Total current liabilities	652906	-324409	222642	-414750	879466
Total liabilities	676520	-264707	189387	-328167	917677
Total equity & liabilities	1041541	-365450	459643	651132	846423

 

Change as a percent

Percent change =Dollar change /Base Period Amount *100

 

Year	2015	2016	2017	2018	2019
ASSETS
Non current assets
Tangible  assets	10.45144	2.675596	16.61895	15.5836	-6.05882
Formers (moulds)	-72.242	3.036944	-11.2957	40.26159	14.42186
Investment properties	21.94529	4.786738	-228.048	20.01275	3.846154
Investment in subsidaries	16.52008	0	14.52424	-2.27743	-2.8567
Amount due from subsidaries	-15.2867	26.94426	40.32808	14.12998	-62.6242
Other non current financial assets
Defferred assets	-15.2867	30.30756	49.35547	-23.5111	61.98212
Current assets
Inventories	-46.4999	-2.5278	25.78986	19.62361	14.91179
Trade and other receivables	-5.19883	6.161091	23.217	-21.777	23.98264
Advances and pre payments	-1.7E+08	51.24283	-125.619	24.7194	11.55623
Amounts due from subsidaries	97.56863	-86.0942	-70.3422	66.4269	30.79484
Cash and short term deposits	-1329.54	-167.259	-61.2006	60.20271	60.01557
	-137.506	-24.0731	4.504729	23.83201	26.39532
Total assets	1.474066	-6.21499	7.250145	9.313982	10.79989
EQUITY AND LIABILITIES
Equity
Stated capital
Capital reserves	8.221783	0	11.49975	-16.2382	0
Revenue reserves	12.92637	-3.87738	8.613806	26.21443	-3.23529
Equity attributable to equity holders	10.44809	-2.97005	7.379568	21.09867	-1.55908
Total Equity	10.44809	-2.97005	7.379568	21.09867	-1.55908
Non -current liabilities
Defined benefit obligation	7.392375	15.69074	-9.57703	19.95828	8.095019
	7.392375	15.69074	-9.57703	19.95828	8.095019
Current liabilities
Trade and other payable	-6.92924	-58.7557	15.05306	4.589771	30.78195
Interest bearing loans & borrowings	12.09823	-83.0782	51.47897	32.83684	39.85593
Amounts due to subsidaries	44.59826	6.990232	-10.7933	-120.327	15.93758
Income tax payable				100
Total current liabilities	26.8455	-15.3918	9.554138	-21.6515	31.46528
Total liabilities	24.57502	-10.6386	7.073127	-13.9682	28.08871
Total equity & liabilities	16.67644	-6.21499	7.250145	9.313982	10.79989

 

 

 

 

 

 

 

 

 

Trend Analysis

Trend Percent=Analysis Period Amount/Base Period Amount*100%

 

Year	2019	2018	2017	2016	2015
Revenue	3898365	2266036	1792509	1685401	2564913
Cost of sales	3025141	1836512	1381449	1242316	1939746
Gross profit	873224	429524	411060	443085	625167
Year	2019	2018	2017	2016	2015
Revenue	151.99	88.35	69.89	65.71	100.00
Cost of sales	155.96	94.68	71.22	64.05	100.00
Gross profit	139.68	68.71	65.75	70.87	100.00

 

 

 

Vertical Analysis

Common size percent=Analysis Amount/Base Amount *100

Statement of Financial Position

Year	2015	2016	2017	2018	2019
ASSETS
Non current assets
Tangible  assets	52.57973	-3.4842	20.63602	16.18136	-4.56
Formers (moulds)	-29.1623	-0.31851	-0.84631	3.564561	1.15
Investment properties	93.43935	-5.39253	-62.2657	4.822371	0.74
Investment in subsidaries	564.8245	0	116.3647	-12.5935	-11.81
Amount due from subsidaries	-2.4005	-1.45902	2.909649	0.838079	-1.76
Other non current financial assets	0	0	0	0	0.00
Defferred assets	-2.4005	-1.72034	4.398196	-1.19745	6.39
Current assets	0	0	0	0	0.00
Inventories	-186.978	2.497469	27.29923	18.24331	12.53
Trade and other receivables	-40.6923	-12.9462	50.5166	-27.4671	30.61
Advances and pre payments	-8.2E+07	-12.5402	-10.8332	1.99898	0.81
Amounts due from subsidaries	988.3201	118.0566	-45.0212	89.39339	46.07
Cash and short term deposits	-1793.09	21.26283	-3.83733	6.69557	12.84
	-3272.63	116.3306	18.12407	88.86416	102.87
Total assets	100	100	100	100	100.00
EQUITY AND LIABILITIES
Equity
Stated capital
Capital reserves	1.540314	0	5.516238	-4.73038	0
Revenue reserves	33.49633	27.56684	53.2807	155.1298	-14.2666
Equity attributable to equity holders	35.03664	27.56684	58.79694	150.3995	-8.41825
Total Equity	35.03664	27.56684	58.79694	150.3995	-8.41825
Non -current liabilities
Defined benefit obligation	2.276819	-16.3366	-7.23496	13.2973	4.514409
	2.276819	-16.3366	-7.23496	13.2973	4.514409
Current liabilities
Trade and other payable	-3.30654	50.33356	12.06958	2.722797	20.2947
Interest bearing loans & borrowings	6.278389	67.11588	68.1468	45.68751	70.92801
Amounts due to subsidaries	59.71469	-28.6797	-31.7784	-113.507	13.75825
Income tax payable	0	0	0	1.400177	-1.07712
Total current liabilities	62.68654	88.76974	48.43803	-63.6968	103.9038
Total liabilities	64.95376	72.43316	41.20306	-50.3995	108.4182
Total equity & liabilities	100	100	100	100	100

Income Statement

Year	2015	2016	2017	2018	2019
Revenue	100	100	100	100	100
Cost of sales	75.6262	73.7104	77.0679	81.0451	77.6003
Gross profit	24.3738	26.2896	22.9321	18.9549	22.3997
Other income and gains	22.4394	11.3885	23.4399	11.5309	6.1625
Distribution costs	0.9568	1.5188	1.0881	1.2185	0.8637
Administrative expenses	14.4068	25.1674	22.5402	19.9483	15.9349
Other expenses
Impairment reversal / (loss) on investment and other amounts due	4.0937	0.9072	0.0109	0.0092	2.5756
Finance costs	2.8789	3.9682	5.8555	3.9931	3.2654
Finance income	0.2781	0.2967	0.4638	0.7100	1.4322
Profit before tax	24.4169	10.1637	18.7307	7.4124	7.5158
Tax (expense) / reversal	0.4373	0.3418	1.1817	0.2045	0.8920
Profit for the year	23.9796	10.5055	19.9124	7.2078	8.4078
Attributable to:
Equity holders of the parent	23.9796	10.5055	19.9124	7.2078	8.4078
Non-controlling interest
	23.9796	10.5055	19.9124	7.2078	8.4078
Basic earnings per share (Rs.)	0.0004	0.0002	0.0003	0.0001	0.0001
Diluted earnings per share (Rs.)	0.0004	0.0002	0.0003	0.0001	0.0001
Dividends per share (Rs.)	0.0003	0.0001	0.0002	0.0001	0.0001

 

 

Ratio Analysis

 

	2015	2016	2017	2018	2019
Working Capital	-240962	-341683	-481019	512354	503564
current ratio	0.350828	0.300332	0.291698	0.347297	0.420883
acid test ratio	0.730783	0.624145	0.567784	0.923974	0.904335
accounts receivable turnover	3.469214	2.264533	2.027693	2.488267	4.100025
merchandise turn over	2.623634	1.669196	1.5627	2.016619	3.181629
days sale's uncollected	102.5456	166.3042	203.648	132.2846	101.1535
Day's sales in inventory	69.65865	106.0831	128.5524	120.3075	85.8364
total assets turnover	0.413726	0.277988	0.293375	0.339973	0.525803
debt ratio	0.440772	0.423149	0.422342	0.336064	0.41686
equity ratio	0.559228	0.576851	0.577658	0.663936	0.58314
time interest earned	9.481473	3.561289	4.198798	2.856317	3.301647
profit margin	24.41689	10.16369	18.73067	7.412371	7.515843
Gross margin	0.243738	0.262896	0.229321	0.189549	0.223997
return on total assets	0.09921	0.029204	0.058418	0.024505	0.044208
return on common shareholder's equity	0.185803	0.051436	0.101197	0.039339	0.071163
book value per common share	0.058346	0.056664	0.061178	0.077538	0.076347
basic earnings per share	0.010275	0.002958	0.005963	0.002728	0.005475
price earnings ratio	7.4	14.3	10.33	5.38	5.38
dividend yield	0.050725	0.027397	0.032895	0.035088	0.057692

 

 

 

05.DISCUSSION

According to vertical analysis of DPL it figure out the company having 65% of noncurrent assets and about 35% current assets thought 5 years. It keeps 55% of equity and 45% liabilities through the recent 5 years but there is increment of the total liabilities in holistic view.

When analyze the trend of the company it figures out the increasing of revenue from contract with customer and decline of the cost of sales of the company. So that gross profit has treaded of increase. It is a good trend of the company

There is various type of ratio analysis. Current ratio of the DPL has trend of decreasing and suddenly increasing in2019.This ratio erasure the short term debit paying ability of the company in 2019 they become good in that case.

According to accounts receivable turnover of the DPL about 2-3 tie company convert its receivable in to cash in each year. Company is sold and replaces the merchandise in3-4 times during the year. But liquidity of receivable of the company is high sometimes it is more than 3 months according to day’s sales uncontrolled.

According to days sales inventory liquidity of the inventory is ore about 3 months but it decreases in recent year. There is about 0.20-0.5 times of efficiency of assets in producing sales.

Debt ratio and equity ratio confirm the vertical analysis results by saying about 55% equity ratio and 45% liability ratio. According to time interest earned there is decrement of that ability of firs operations to provide protection to long term creditors.

According to profit margin there is about 7-8% of ability to earn a net income from sales. There is 21-22% of amount remaining of one rupee for sales that is left to cover operating expenses and a profit after considering cost of sales. Return of the assets figure out the 20-50% profitability of the company.

There is 4-7% of owner’s investment employed to earn incomes. There is 0.05-0.07 fraction of liquidation at reported amount.0.002-0.005 of income was earned for each share of common stock outstanding.

DPL has about 10 times of price earnings ratio. When analyze the past 5 years there is a increasing trend It is an evidence for well-being of the company. There is about 3% of cash evident on the current market price of the stock.