PTA Grupp AS Financial results 28.05.2007
PTA`S financial results 1Q,2007
Important events in Quarter 1 2007
Repurchase of shares by Milavitsa
In March 2007 SFG's subsidiary Milavitsa ZAO completed
its share repurchase programme in the course of which it
repurchased 2,353 shares (roughly 19.1% of the share
capital) at a price of approximately 439 euro (6,868.90
kroons) per share. The extraordinary general meeting of
Milavitsa which convened on 23 March 2007 decided to
cancel the repurchased shares. After the cancellation,
SFG's ownership interest in Milavitsa will increase from
62.5% to approximately 78,3 %.
At the date these financial statements are authorised for
issue, registration of the cancellation of the shares is
still under way.
Restructuring of the Group
In 2006 PTA Grupp AS acquired SFG through a share swap in
which the shares in SFG were paid for with shares in PTA
Grupp AS. For this, PTA Grupp AS issued 36,000,323 new
shares which were subscribed by the shareholders of SFG
who consequently acquired an approximately 94.9% stake in
PTA Grupp AS.
As a result of the transaction an essentially new group
emerged which is engaged in the manufacturing and
distribution of women's apparel and lingerie in the
Baltic countries and elsewhere in Eastern Europe.
According to the Listing and Trading Prospectus of PTA
Grupp AS (see the Prospectus p 66 Combined Management)
the Group will be managed by an international team whose
members will be part of the management board of the
listed holding company. To execute the plan, the Group's
structure will be changed.
The restructuring will involve the following steps:
· AS Silvano Fashion Group is going to merge with PTA
Grupp AS.
· After the merger AS Silvano Fashion Group as a legal
person will be dissolved and PTA Grupp AS will be
renamed AS Silvano Fashion Group.
· A new subsidiary will separate from PTA Grupp AS
(which according to plan will be renamed AS Silvano
Fashion Group). The new subsidiary will be named PTA
Grupp AS.
The new subsidiary will be transferred the development of
the PTA concept and the shares in AS Klementi and shares
other subsidiaries acquired before the acquisition of
SFG. The membership of the management board of PTA Grupp
AS (which according to plan will be renamed AS Silvano
Fashion Group) will change as outlined in the Listing and
Trading Prospectus of PTA Grupp AS.
The changes in the Group's structure will have no impact
on the Group's operating activity or the interests of its
investors (excluding positive impacts resulting from
greater transparency). According to plan, the
restructuring will take place in the second quarter of
2007.
On 13 April 2007 PTA Grupp AS and SFG concluded a
notarised merger agreement under which SFG will be
combined with PTA Grupp AS and will be deleted from the
Commercial Register. On the same date, the division plan
of PTA Grupp AS (which according to plan will be renamed
AS Silvano Fashion Group) was approved. In conformity
with the division plan, all business operations related
to PTA brand will be transferred to the new subsidiary
which will be named PTA Grupp AS. The division plan has
to be approved by an extraordinary general meeting of the
shareholders of PTA Grupp AS.
Extraordinary general meeting
The management board of PTA Grupp AS has called an
extraordinary general meeting of the shareholders for 31
May 2007. The agenda of the extraordinary general
meeting:
· Approval of the merger agreement between PTA Grupp
AS and its subsidiary SFG by the general meeting and
adoption of a merger decision
· Amendment of the Articles of Association of PTA
Grupp AS and approval of the new wording of the Articles
of Association
· Change of business name
· Approval of a division plan and the Articles of
Association of the new company
· Removal of members of the supervisory board and
election of new members of the supervisory board.
Consolidated financial results , Q1 , 2007
In the quarter 1 of 2007, PTA Grupp earned a net profit
of EEK 33,5 million ( EUR 2,1 million), which increased
by EEK 33,0 million ( EUR 2,1 million) as compared to Q1
of the previous year. The net profit of quarter 1 of this
year increased by 71,9 times compare to quarter 1 of the
previous year and the achieved profit margin amounted to
9,0 % ( Q1 2006 : 1,5 %)
The sales revenue in Q1 amounted to EEK 368,5 million
(EUR 23,5 million) increasing by EEK 337,4 million ( EUR
21,6 million) as compared to the same period previous
year.
The operating profit of the PTA Grupp in Q1 amounted to
EEK 63,1 million ( EUR 4,0 million). Compared to the
same period of the previous year, the operating profit of
PTA Grupp in Q1 increased by EEK 62,3 million (EUR 3,9
million) and the operating profit margin amounted to 16,9
% (Q1 2006: 2,5 %)
Acquisition of Silvano Fashion Group in 2006 shows
remarkable growth in company's results and profits and
directly effected earnings per share. By Q1 2006 earnings
per share was EEK 0,24 , by Q1 2007 earnings per share
comprise EEK 0,88 which is 3,6 times more compare to the
precious year.
SALES
Sales by Products / Services
In Q1 2007 the sales revenue related to sales of women'
s apparel increased by EEK 12, 9 million ( EUR 0,8
million) as compared to Q1 2006, forming 9,7 % of the
PTA Grupp sales revenue ( Q1 2006 : 76,5 %). Lingerie
sales in Q1 2007 amounted to EEK 323,4 million ( EUR 20,7
million) forming 87,3 % of total Group sales revenue. The
sales of subcontracting increased by EEK 1,0 million (
EUR ( 0,1 million) as compared to Q1 2006. The
subcontracted service sale in Q1 2007 amounted to EEK 7,6
million ( EUR 0,5 million) forming 2,5 % of total sales
revenue.
Q1,2007 Q1,2006 Change Q1,2007 Q1,2006 Change Q1,2007 % Q1,2006
EEK EEK EEK EUR EUR EUR percentage
million million million million million million from sales, %
Women's 36,8 23,8 13,0 2,3 1,5 0,8 9,7% 76,5%
apparel
Lingerie 320,2 0 320,2 20,6 0 20,6 87,3% -
Subcontracting
services and
other sales 11,5 7,3 4,2 0,7 0,5 0,2 3,0% 23,5%
Total 368,5 31,1 337,4 23,6 2,0 21,6 100,0% 100,00%
Sales by Markets
Women's apparel
Women's apparel sales revenue has increased in all
markets, and the largest growth as reached attained in
Baltic States. In Q1 2007 the sales volume to the
Estonian market increased EEK 4,6 million ( EUR 0,3
million) as compared to the same period of the previous
year, increasing by 29,9% as compared to Q1 of 2006 .
Compared to the same period of the previous year, in the
first quarter of 2007 the sales volume of women's apparel
in foreign increased by EEK 9,8 million (EUR 0,6 million).
Sales to foreign market made up 56,1% of total apparels
sales revenue (Q1 2006 : 50,6%) . Sales in main foreign
markets increased 30,0%; among this to Latvia
55,6% and Finland 14,9%.
Lingerie
Most of lingerie sales revenue relates to Russia markets
amounting in EEK 178,0 million ( EUR 11,3 million) giving
48,3% of all lingerie sales volume for Q1 2007. Sales in
Russia comprise both - retail sales and wholesales.
Second biggest region of lingerie sales is Belarus,
amounting to EEK 53,0 million ( EUR 3,4 million ) giving
14,4 % of all lingerie sales revenue. As lingerie sales
as new business line for company, comparable figures of
previous periods are not presented.
In terms of lingerie brands, the sales of Milavitsa
accounted for 75% of total lingerie sales revenue in the
Q1 2007 and amounted to EEK 241,8 million ( EUR 15,5
million) . The sales of Lauma accounted for 12,6% and
amounted to EEK 40,4 million ( EUR 2,6 million). Other
brands , such as Alisee, Aveline, Laumelle , Lauma Aqua
and Bellita comprise 12,4 % of total lingerie sales for
Q1 2007 amounting to EEK 38 million ( EUR 2,5 million)
Q1,2007 Q1,2006 Change Q1,2007 Q1,2006 Change Q1,2007 Q1,2006
EEK EEK EEK EUR EUR EUR percentage
million million millionmillion million million from sales,%
Estonia 49,0 15,4 33,6 3,1 1,0 2,1 13,3 % 49,5%
Finland 16,3 9,4 6,9 1,0 0,6 0,4 4,4 % 30,2%
Latvia 11,9 5,4 6,5 0,7 0,4 0,3 3,3 % 17,4%
Belarus 53,0 0 53,0 3,4 0 3,4 14,4 % 0%
Ukraine 26,3 0 26,3 1,6 0 1,6 7,1 % 0%
Russia 178,0 0 178,0 11,3 0 11,3 48,3 % 0%
Other 34,0 0,9 33,1 2,5 0 2,5 9,2 % 2,9 %
markets
Total 368,5 31,1 337,4 23,6 2,0 21,6 100,0 % 100,0 %
Retail Sales
Total retail sales of PTA Grupp in Q1 2007 amounted to
EEK 32,3 million ( EUR 2,0 million) in Q1 2007,
increasing 100% as compared to the Q1 2007 due to
lingerie business acquisition.
Retail sales areas are located in Estonia, Latvia,
Russia, Belarus , Poland , Lithuania and Ukraine. By end
of March , Group operated 57 retail outlets with
a total area of 7,665 square meters. Women's apparel
retail sales areas are located in Estonia, Latvia ,
Lithuania and Russia. By end of Q1 2007 women ‘s apparel
was sold in 18 store with total sales area of 3903 square
meters ( 31.03.2006 : 2588 square meters). Lingerie
sales areas are located in Russia, Belarus, Latvia,
Poland . By end of Q1 2007 there were 39 stores with
total area of 3762 square meters for lingerie sales.
Within Q1 2007 6 new stores were opened : 5 for
women's apparel sales , operating under PTA trademark ,
including 3 in Russia, 1 in Estonia and there was opened
first store selling women's apparel in Lithuania, and 1
store for lingerie sales under Oblicie trademark in
Russia.
Number of stores
31.03.2007 31.03.2006
Estonia 8 6
Latvia 6 5
Poland 7 -
Belarus 16 -
Russia 19 -
Lithuania 1 -
Total stores 57 11
Total sales area, m2 7 665 2 588
The increase in retail sales of women's apparel of the
like-for-like spaces was 35% compared to Q1 2006, whereas
in Estonia the increase was 40%.
In addition to the general seasonal marketing campaigns
directed to the new markets, marketing operations
emphasized on campaigns concerning expansion o the
Russian markets.
Wholesales
In the Q1 2007 the wholesales comprises most of Group
sales revenue, giving 91% of total sales. Main
wholesales regions for lingerie sale are Russia and
Belarus, for women's apparel - Finland and Baltic States.
Sales revenue from women's apparel wholesales increased
by 21,2 % as compared to the Q1, 2006.
Sales of subcontracting
As compared to Q1 2006 the sales of subcontracted
services increased by EEK 4,2 million ( EUR 0,2
million). The increase in sales of subcontracted service
is caused by new available production capacity, resulted
from increased volume of goods purchased from Far East by
the parent company.
Profit
The net profit of the PTA group ( after taxes and
minority shareholding) for the Q1 2007 amounted to EEK
33,4 million ( EUR 2,1 million). Net profit margin for
Q1 2007 was 9,0 % compare to 1,5% in the same period of
previous year.
The operating profit before depreciation of fixed assets
and financial income and expenses formed EEK 53,2
million ( EUR 3,4 million), increasing by EEK 51,1
million ( EUR 3,26 million) compare to the same period
of the previous year. Operating profit margin for Q1 2007
was 19,6 % compare to 6,8 % in Q1 2006.
Balance sheet
The consolidated balance sheet total assets amounted to
EEK 853,9 million ( EUR 54,6 million) . Compare to the
end of previous year the balance sheet total assets has
increased by EEK 41,7 million ( EUR 2,7 million) . The
balance of inventories stayed at same level as of end of
Year 2006. Trade receivables has increased by EEK 121,1
miilion ( EUR 7,7 million) amounting to EEK 232,9
million ( EUR 14,9 million) . Trade receivables balance
is higher due to wholesale seasonality and reviewed
agreements with customers to keep competitivness,
specially in CIS markets.
Trade payables has increased by EEK 16,0 million (EUR
1,0 million) compare to end of previous year amounting to
EEK 103,6 million ( EUR 6,6 million) . With regard to
increase in sales volumes and stores opening plan ,
volumes of trade payables increased.
At the end of the Q1 of 2007,the Group ‘s borrowings
amounted to EEK 33,8 million ( EUR 2,2 million)
and it has decreased by EEK 5,7 million ( EUR 0,4 million)
since the beginning of year. In Q1 2007 overdraft limit was
increased by EEK 6,0 million ( EUR 0,4 million) amounting
in total to EEK 11,0 million ( EUR 0,7 million).
Investments
During the first three month of 2007 the Group investments
totalled to EEK 25,1 million (EUR 1,6 million) . A
total of EEK 10,5 million ( EUR 0,7 million) was
invested to retail operations, other investments went
to ensure production operations.
Personnel
By end of Q1 2007 , Group employed 2929 employees ,
including 194 in retail operations , 2236 in production
. Rest of employees are employed for wholesale,
administration and support operations. By acquisition of
SFG by 2006, number of employees outside Estonia
comprises 87,6 % amounting to 2526 employees . Average
number of employees in Q1 2007 was 2769 .
Total salaries and wages for Q1 2007 amounted to EEK 52,2
million ( EUR 3,3 million) . The remuneration paid to
members of the Management Board and Supervisory Board
totalled EEK 0,4 million ( EUR 0,03 million).
Key financial indicators for Group for Q1 2007
Key financial indicators Q1 2007 Q1 2006 Change
Sales revenue ,in thousand 368,526 31,102 337,424
of kroons
Revenue, in thousand of 371,535 31,194 340,341
kroons
EBITDA, in thousand of 72,972 2,134 70,838
kroons
EBIT, in thousand of 63,115 787 62,328
kroons
Operating margin, % 17.1% 2.5% -
Profit/loss for the period 33,473 465 33,008
attributable to equity
holders, in thousand of
kroons
Net margin, % 9.1% 1.5% -
ROA, % 4.0% 0.9% -
ROE, % 7.1% 2.9% -
Earnings per share (EPS), 0.88 0.24 0.64
in kroons
Current ratio 3.5 1.2 -
Quick ratio 2.2 0.4 -
Inventory turnover ratio 1.6 1.2 -
Definitions on Key ratios
Operating margin = operating profit / sales revenue
Net margin = net profit attributable to equity holders of
the parent / sales revenue
ROA (return on assets) = net profit attributable to
equity holders of the parent / average total assets
ROE (return on equity) = net profit attributable to
equity holders of the parent / average equity
EPS (earnings per share) = net profit attributable to
equity holders of the parent / weighted average number of
ordinary shares
Current ratio = current assets / current liabilities
Quick ratio = (current assets - inventories) / current
liabilities
Inventory turnover ratio = sales revenue / period's
average inventories
Balance sheet
Consolidated, unaudited
31.03.07 31.03.06 31.12.06 31.03.07 31.03.06 31.12.06
EEK EEK EEK EUR EUR EUR
ASSETS
Current assets
Cash at bank and in 109,182 3,348 200,460 6,978 214 12,812
hand
Trade receivables 232,868 6,775 111,729 14,883 433 7,141
Other short-term
receivables and prepaid
expenses 58,237 2,754 45,094 3,722 176 2,882
Prepaid taxes 6,399 97 31,568 409 6 2,017
Inventories 229,114 24,565 230,254 14,643 1,570 14,716
Total current assets 635,800 37,539 619,106 40,635 2,399 39,568
Fixed assets
Investments in equity 78 0 78 5 0 5
accounted investees
Available for sale 1,768 0 1,772 113 0 113
financial assets
Other receivables 4,617 700 2,349 295 45 150
Property, plant and
equipment 195,097 9,426 172,281 12,469 602 11,011
Intangible assets 16,538 6,430 16,551 1,057 411 1,058
Total non-current
assets 218,098 16,556 193,031 13,939 1,058 12,337
TOTAL ASSETS 853,898 54,095 812,137 54,574 3,457 51,905
LIABILITIES AND OWNERS`
EQUITY
Current liabilities
Loans and borrowings 25,692 14,882 29,907 1,642 951 1,911
Trade payables 103,580 7,774 87,534 6,620 497 5,594
Corporate income tax 6,665 0 5,976 426 0 382
liabilities
Other tax liabilities 21,013 3,866 19,369 1,343 247 1,238
Other short-term
payables 21,120 5,745 27,815 1,733 367 1,778
Short-term provision 12 12 12 1 1 1
Total current
liabilities 184,082 32,279 170,613 11,765 2,063 10,904
Long-term liabilities
Loans and borrowings 8,058 5,509 9,544 515 352 610
Deffered tax 203 0 201 13 0 13
liabilities
Other long-term 0 137 0 0 9 0
payables
Long-term provisions 141 143 139 9 9 9
Total long-term 8,402 5,789 9,884 537 370 632
liabilities
Total liabilities 192,484 38,068 180,497 12,302 2,433 11,536
Owners`equity
Share capital 379,472 19,469 379,472 24,252 1,244 24,252
(nominal value)
Share premium 83,011 40,994 83,011 5,305 2,620 5,305
Legal reserve 1,127 1,046 1,046 72 67 67
Translation reserve - 23,908 30 - 10,710 -1,527 2 -684
Retained profit 51,227 -45,512 - 987 3,274 -2,909 -63
Total equity
attributable to
majority shareholder 490,929 16,027 451,832 31,376 1,024 28,877
Minority interest 170,485 0 179,808 10,896 0 11,492
Total equity 661,414 16,027 631,640 42,272 1,024 40,369
TOTAL LIABILITIES AND
OWNERS` EQUITY 853,898 54,095 812,137 54,574 3,457 51,905
Income Statement-
Q1 2007
Consolidated,unaudited
2007 2006 2007 2006
Q1 Q1 Q1 Q1
EEK EEK EUR EUR
thousand thousand thousand thousand
Operating revenue
Sales revenue 368,526 31,102 23,553 1,988
Other operating
revenue 3,009 92 192 6
Total operating
revenue 371,535 31,194 23,745 1,994
Change in finished 3,901 1,180 249 75
goods and work in
progress
Goods, raw
materials and
services -150,386 -11,686 -9,611 -747
Other operating
expenses -99,267 -6,694 -6,344 -427
Staff costs -52,277 -11,608 -3,341 -742
Other operating
charges -534 -252 -34 -16
Total operating
charges -298,563 -29,060 -19,081 -1,857
EBITDA 72,972 2,134 4,664 137
Depreciation -9,857 -1,347 -630 -86
Operating
profit/loss 63,115 787 4,034 51
Financial
income/expenses
Interest expenses -788 -243 -50 -16
Gains / losses on
conversion of
foreign currencies
Other financial -131 -76 -9 -5
income / expenses 3,760 -3 240 0
Total financial
income / expenses 2,841 -322 181 -21
Profit before 65,956 465 4,215 30
corporate income
tax 65,956 465 4,215 30
Corporate income
tax -23,835 0 -1,523 0
Net profit 42,121 465 2,692 30
Net profit
attributable to
minority
shareholders 8,648 0 553 0
Net profit
attributable to
parent company 33,473 465 2,139 30
Earnings per share
Basic earnings per
share (EEK/EUR) 0.88 0.24 0.06 0.02
Diluted earnings
per share 0.88 0.24 0.06 0.02
(EEK/EUR)
Peeter Larin
Chairman of the Management Board
Tel + 372 6 710 700
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