Arafa Holding
Arafa Holding releases results for the fiscal year ending March 31st 2007
Cairo, Egypt – 17th of June 2007
Al Arafa for Investments and Consultancies "Arafa Holding" released its consolidated results for the fiscal year ending March 31st 2007.
- The Consolidated Revenues recorded US$ 292.4 million in the fiscal year ending March 31st 2007 compared to the achieved level of US$ 275.3 million as per the pro forma Consolidated Revenues of the fiscal year ending March 31st 2006, a 6.2% increase. In 2007, international business represented 89.9% of the holding’s Consolidated Revenues.
- The holding company’s Gross Profit amounted to US$ 96.8 million in the fiscal year ending March 31st 2007, which represents an increase of 13.8% if compared to the pro forma consolidated results of US$ 85.1 million achieved in the fiscal year ending March 31st 2006.
- EBITDA increased by 29.1% reaching US$ 36.03 million in the fiscal year ending March 31st 2007 compared to the consolidated results of the fiscal year ending March 31st 2006. EBITDA margin recorded 12.3% in 2007 up from 10.1% in 2006.
- Net Profits after Tax and Minority Interest recorded US$ 24.2 million in the fiscal year ending March 31st 2007, which represents an increase of 28.5% compared to the achieved level of US$ 18.8 million as per the pro forma consolidated results of the fiscal year ending March 31st 2006.
Revenues Breakdown by Segment:
The Holding Company's Consolidated Revenues is generated from three segments; Retail, Apparel & Tailoring, and Textile:
- The Retail Segment continues to be the largest contributor of the holding company’s revenues representing 66.2% of the company’s Consolidated Revenues. In 2007, the Retail Segment’s sales amounted to US$ 193.7 million compared to US$ 189.3 million in 2006, which represents an increase of 2.3%. In 2007, the slowdown in the UK market was reflected on BMB’s revenues that reached GBP 88.9 million down from GBP 94.5 million in 2006. However, the positive results of the restructuring of BMB was mirrored on the company’s bottom line profits that reached GBP 1.01 million in 2007 compared to net losses of GBP 0.43 million in 2006. On the other hand, Concrete, the holding company’s local retailer, showed a strong growth in terms of revenues and profits. The company’s revenues reached LE 135.3 million up from LE 92.8 million, while bottom line profits recorded LE 37.5 million up from LE 17.9 million.
- The Apparel & Tailoring Segment, which represents 31.1% of the Consolidated Revenues in the fiscal year ending March 31st 2007, recorded revenues of US$ 91.0 million up from US$ 78.7 million in 2006, an increase of 15.7%.
- The Textile Segment which contributes to 2.6% of the holding company’s Consolidated Revenues recorded revenue of US$ 7.6 million in 2007 compared to US$ 7.3 million in 2006, an increase of 4.7%.
- In terms of bottom line profits, the Apparel & Tailoring Segment continued to be the main generator of profitability. In 2007, the Net Profits after Tax and Minority Interest amounted to US$ 24.2 million, of which 60.7% was generated from the Apparel & Tailoring Segment, followed by the Retail Segment,30.9%, with the balance of 8.4% generated from the Textile Segment.
Vertically Integrated Business Model:
The vertically integrated operations represent one of the key strengths of the holding company’s business model.
- As of March 2007, 17.1% of the Apparel & Tailoring Segment’s Gross Revenues were directed to the holding company’s Retail Segment.
- As of March 2007, 54.4% of the Textile Segment’s Gross Revenues were directed to the holding company’s Apparel & Tailoring Segment.
Recent Developments:
In line with the strategy to grow its international profile, the holding company acquired the Melka brand and its European distribution channels during the second quarter of 2007. Melka is a highly recognized Swedish menswear brand that has been retailed across Europe for more than 60 years through nearly 1,600 retailers. Arafa Holding will capitalize on its vertically integrated business model and its competitive manufacturing capabilities to improve Melka’s current supply chain and accordingly its margin. On the other hand, Melka’s distribution channels will be used for distributing the Querini brand at the first stage, and then it will be followed by the Concrete brand to penetrate the international market.
Comment from Chairman:
Dr.Alaa Arafa, Arafa Holding Chairman and CEO, commented:” We still have two acquisitions to consider in 2007; however, it will always be our main aim to improve and benefit from the targeted companies’ supply chain. Additionally, we are currently finalizing a long term business relationship with one of the most reputable and sizable brand in the menswear. The start up is scheduled during the first quarter of 2008”.