Image Pakistan Expansion to Begin by Feb 2025
Staff Report:
Islamabad: Topline Securities hosted a Corporate Briefing Session (CBS) for Image Pakistan (IMAGE), where senior management discussed the recent financial performance and future outlook of the company.
On the expansion front, the management informed that a contract for the remaining 22 machines has been established, and they are expected to be shipped in the coming months, ahead of the Chinese New Year. Production is set to begin in February 2025.
CAPEX is mainly for the 22 embroidery machines which will be approximately US$$600,000 in the next 9 months.
Historically, 4Q profit remain on lower side due to substantial advertising costs, including expensive international shoots due to festive season.
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Gross margins in 4QFY24 were down to 28% as compared a 43% average margin in other quarters. Gross margins declined due to heightened competition and seasonal discounting, as demand surged with two Eids and the summer lawn season, necessitating competitive price adjustments.
The Tipu Sultan branch is the second-best outlet after Dolmen Mall Clifton, with high footfall due to its prime location, where customers are more likely to purchase and afford IMAGE products, even without advertising.
On a consolidated basis, the company recorded sales of Rs4bn, up from Rs2.7bn, reflecting a 48% YoY increase. The sales breakdown was 74% from retail outlets and 26% from online channels.
EBITDA rose from Rs454mn to Rs698mn, reflecting a 54% YoY increase. PAT increased from Rs389mn to Rs400mn, reflecting a 3% growth.
Growth in the recent years are mainly driven by a stronger online presence and an improved portfolio mix.
IMAGE operates three subsidiaries: Image Tech Ltd., Image International Ltd. (serving in the UK/EU market), and Tri-Star Image (USA) Inc. (serving USA, UAE, and India).
IMAGE currently operates 14 retail outlets and plans to open a new store at Dolmen Mall in Lahore in November 2024. Additionally, one store each is targeted to open in Faisalabad and Sialkot in FY25.
Retail outlets typically cover 3,500–4,000 sq. ft. in malls, compared to 2,000–3,000 sq. ft. in other locations. Costs range from Rs8,000–10,000 per sq. ft. in malls and Rs6,000–7,000 in other areas.
IMAGE experiences a dip in sales during the winter season, as winter is less prevalent in most parts of Pakistan, except for some northern cities. To counter this seasonal decline, IMAGE has launched an innovative Wedding Festive Collection, targeting the demand for wedding and formal wear, as well as gifting options.
India, approximately 8-10% of IMAGE’s total sales are generated from this market. IMAGE products reach Indian customers primarily through stockists (75%) and online website orders (25%).
