Lahore May 22 2023: Octopus Digital Limited (OCTOPUS) skip cash payout as management focus to preserve cash for business growth and deploy funds for future Research and Development (R&D) expenditures.
Share price of the company drop PKR 1.48 or 3.37 percent in today’s trading at Pakistan Stock Exchange to close the day at PKR 42.44.
“Given the Current Pakistan economy situation and Company’s growth plan in the digital drive, it is decided by the Board to preserve cash for business growth and R&D for the intellectual property, so conversion of Reserves to Capital via 15% Bonus shares is proposed. The Company has sufficient cash balances available at FY 2022 end a combination of IPO & Business which company plans to spend on development of Intellectual Property, Marketing and Direct Costs of HR” stated by management of Octopus.
The statement further added, “Business generated from above mentioned activities shall contribute to earnings of the company which is expected to favorably impact the prospect of dividend payment in future.”
In 2022, the Company revenue of PKR 687 million has 10 percent increased as compared to last financial year, though it is not as per the plan but still managed to improve the base line, the major reason being the restriction on imports due to which AMS revenue particularly material intensive was to catchup with the plan. Rest we observed marginal growth of revenues over the years.
The Company gross profit of PKR 378 million is 20 percent decreased as compared to last financial year. This is mainly attributed to the US $ to PKR parity and high inflation due to which the costs of revenue were high and bears a dent in gross margin. The Company plans to improve/ hedge this margin shortfall by entering contracts denominated in US$ and coverage from AMS International particularly Middle east business.
There is PKR 405 million 17 percent increase in net profit after taxation is very encouraging. The management is confident to maintain the positive trend and growth in gross and net profit margins in upcoming FY 2023 and 2024 due to a strong pipeline. The digital drive business is now in the take-off phase and subscription-based orders would be secured in the start of 2023. The management is also very much confident to achieve the targeted revenues in FY 2023 as per the approved corporate plan.
