KARACHI, Jan 8: Crescent Leasing Corporation Limited (CresLease) posted 37.3 per cent growth in after-tax profit to Rs42.3 million for the year ended June 30, 2001, from a year ago taxed profit at Rs30.8 million.

The board decided to skip cash and issued bonus shares instead at 10 per cent, which would absorb Rs15.2 million.

Earning per share for the latest year worked out to Rs2.10. The market price of the share in Crescent Leasing is Rs7.50, which places the stock on an attractive price-to-earnings ratio of 3.6x.

The share in the company had recorded its historic high at Rs36.50 in 1994; the scrip witnessed considerable volatility during the year under review, trading between the high and low of Rs11.4 and Rs4.97. At the last count on June 30, 2001, one ‘non-resident’ shareholder held 20 per cent shares in the company. Other interests in the equity were: Modaraba companies 21 per cent; financial institutions 25 per cent; joint stock companies 20 per cent and individuals 8 per cent.

Crescent Leasing was incorporated on April 7, 1987 as “Credit & Leasing Corporation Ltd”, but could not begin operations for two years due to low capital base and inadequate fund mobilization. Commercial operations finally began in August 1989. Crescent Investment Bank Ltd., and National Development Finance Corporation injected capital dose of Rs20 million, followed by a public offer of shares worth Rs25 million in the third quarter of 1992. In December 1993, the company was re-named.

Listed with the paid-up capital of Rs50 million, the company has since rapidly raised it to over Rs200 million. 1996 saw the major breakthrough with the board proposing the maiden cash dividend at 15 per cent for the 18 months.

The company has been taking big strides in the recent years, so that, at the end of June 2001, it had total assets that crossed the billion rupee mark to Rs1.138 billion; five years ago, the balance sheet footing was less than half that figure at Rs487 million.

Directors stated in their 2001 annual report that new leases written during the year under review amounted to Rs508 million, which represented 52.5 per cent increase over Rs333 million worth of new leases written the previous year. Net investment in leases thus, stood at Rs958 million at end-June 2001, up 24.8 per cent over Rs768 million at the close of last year.

Directors stated that the risk profile of the company had remained at prudent levels. Average lease size (excluding consumer finance) was placed at Rs1.7 million and exposure to a single industrial sector (textile) did not exceed 19.1 per cent. Plant and machinery remained the major leased asset claiming 63.9 per cent of the total portfolio; followed by vehicles at 29.9 per cent and the remaining in office and other equipment. Recovery during the year improved to 95.5 per cent, from 92 per cent last year.

Total revenue for the year under review amounted to Rs193.6 million representing growth of 11.5 per cent year-on-year, previous total income being Rs173.9 million. Income from lease operations contributed Rs132.9 million, showing 14.7 per cent increase over Rs115.7 million earned last year.

Total expenses in the year under review amounted to Rs137.5 million, up 5.4 per cent from Rs130.4 million the earlier year. Operating profit before provisions increased 29 per cent to Rs 56.1 million, from 43.5 million. Provisions included: for potential lease losses-general Rs6.7 million; specific Rs1.5 million. Provision for doubtful finance for the year were Rs2.2 million and for diminution in value of investment amounted to Rs0.06 million. Profit before taxation increased 35 per cent to Rs45.6 million, from Rs33.8 million.

Shareholders’ equity at June 30, 2001 amounted to Rs380.7 million, which produced the break-up value of Rs18.92 for the share (at 152 per cent premium over the market price). Current ratio worked out at 1.11:1.

The recent Term Finance Certificates (TFC) Issue of the company had been oversubscribed; The TFC issue comprised a pre-IPO of Rs175 million and IPO of Rs75 million.