Padini

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Executive Summary

Our research on Padini Holdings Berhad reveals its overall position and history in the retail industry since 1971 as well as its vision and mission established to the accomplishment of their corporate goals. On top of that, the financial and strategic objectives set by the management to meet its goals are also outlined in the body of the report.

Through the analysis of the financial statements, the liquidity position of the group can be gauged by using a number of measures like the trade receivables and payables period, current and quick ratio, and also its working capital cycle. Collectively, these measures indicate that the group is relatively liquid in nature. Besides, an analysis of the capital structure of the group shows that there is a lack of equity funding as compared to debt funding in the past three years while the group moves to a more conservative approach in managing its debts. On the other hand, while its gearing ratio increases slightly as compared to the past year, it still meets the industry average ratio and hence poses no threat to the going concern of the group.

In terms of the share price, it is noted that there is a significant decrease in share price of the group in year 2011 due to a share split involving subdivision of its existing shares to enhance its share liquidity. However, due to the fact that its growth rate in dividend is increasing annually, its share price is expected to increase in future periods.

Introduction

Purpose of report
This research is carried out to enable us have a better understanding on the financial statements and business direction of Padini Holdings Berhad.

Background of Padini Holdings Berhad

Padini Holdings Berhad is a Malaysia-based investment holding company that sells both mens' and ladies’ shoes and accessories, garments, ancillary products, children’s garments, maternity wear and accessories where goods are exported mainly to Asian countries. Padini and Vincci are its most prominent brands. Its’ operation began as Hwayo Garments Manufacturers Company in 1971 and was affiliated in garment manufacturing and wholesaling and entered the retail industry in 1975 with flagship brand Padini. Other brands like Vincci Miki, Seed, P&Co., PDI and Padini Authentics labels are established in following decades.

In 1991, Home Stores Sdn Bhd was launched to hold all the companies involved in the Group's retail, wholesale and manufacturing businesses. It was subsequently renamed to the present Padini Holdings a year later. In 1995, Padini Holdings Sdn Bhd was converted to a public company limited by shares and adopted the name, Padini Holdings Berhad are soon listed on the Second Board of the Kuala Lumpur Stock Exchange.

The year 2000 witnessed the establishment of Padini Dot Com Sdn Bhd to provide electronic business services and solutions for the group. Padini Holdings was transferred to the Main Board of the KLCI Bursa Malaysia in 2005.

A) Goals and objectives of Padini

Goals
Padini’s vision is ‘To Be The Best Fashion Company Ever’, and mission which is ‘To Exceed Customers’ Expectations And Our Brand Promise’. Nevertheless, Padini also introduced the ‘Caring from the heart’ as their core value. [1] The vision shared by everyone in Padini is to be the best fashion company ever and be the market leader in the retail industry. They are committed to achieve this goal through hard work, discipline and creative endeavor.

Objectives

i) Financial Objectives
Padini Holdings Berhad is involved in investment holding and provision of management consultancy services to its subsidiaries. [2] It has a concept where educated customers nowadays focus in seeking for value in the products which reflect self-esteem, personalities and lifestyle. Hence, prices are set affordable for this segment of customers which will definitely attract their attentions. On top of that, Padini also...
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