Apex’s cost control meets with profit despite flat sales
The sales ticked up as the shoemaker could herald its entry in some new foreign markets
Despite the pandemic-led flat sales, Apex Footwear Limited witnessed a 67% jump in net profit thanks to tightening the belt by the footwear-maker.
At the end of the 2020-21 fiscal year, the company's sales slightly increased by 0.48% to Tk1,187 crore as the profit stood at Tk10.53 crore.
"We emphasised cost control instead of sales during the pandemic. However, the sales posted 0.48% growth," Syed Nasim Manzur, managing director of Apex Footwear, told The Business Standard, adding, the growth figure is satisfactory in the recovery phase of the company.
The managing director said their sales ticked up as the footwear-maker could enter some new foreign markets. Besides, Apex focused on product diversification that would push up the sales further in future.
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Manzur said their export started to recover from the pandemic blues from April this year, and Apex would soon return to pre-pandemic level business if the virus situation does not deteriorate.
At the end of FY21, Apex's earnings per share stood at Tk9.36, which was Tk5.62 a year ago.
The company's board of directors also declared a 35% cash dividend and 5% stock dividend for the shareholders for the last fiscal year. In FY20, Apex paid a 25% cash dividend to the shareholders.
Apex widened up its focus on the local market in 2015. In 2019, the shoemaker declared Tk100 crore investment for building a new factory with a December 2020 deadline. But Covid-19 pandemic got in the way of the business expansion.
In April this year, the company decided to buy a plot worth Tk13.50 crore in Sirajganj Economic Zone for future business expansion aiming at product diversification.
Between 2014 and 2019, Apex experienced negative export growth in four years. As the company logged positive export growth only in 2016-17 and in 2017-18 fiscal year. The pandemic overshadowed the export outlook in recent times.
Apex officials said that they were waiting for the infrastructure strains to ease up to reducing the lead time. They also look for a competitive exchange rate and supporting ecosystem for the export.
The government is pursuing a mid-term plan to boost leather and footwear exports. But the export figures of top shoe exporters like Apex are not speaking volumes about that.
Industry players estimate that the size of Bangladesh's footwear market is Tk17,000 crore, where pairs of shoes sold each year are not less than 20 crore and may be up to 25 crore, according to an EBL Securities research. Besides, the market is growing 12-1% each year.
In the local market, Apex has been growing at a compound annual growth rate of around 20% since 2014 but the pandemic pushed down the local sales growth.
Since 2015, Apex is increasingly investing in its domestic sales network, owning over 260 outlets across the country. The company also has a large number of dealers and franchisees over the country.
Apex Footwear started its journey more than three decades ago on 4 January 1990. It started its retail chain in 1997 to fulfil the footwear needs of Bangladeshi consumers.
The company was listed on both the stock exchanges in 1993.
Sponsors and directors jointly own 31.92% of its shares, while institutional investors own 38.92% and general investors own the rest.
The last trading price of each share of the company at the Dhaka Stock Exchange was Tk298.60 on Wednesday.
