Searle Company (SEARL) recently announced its 4QFY25 results, where the company recorded an unconsolidated profit of Rs165mn (EPS of Rs0.32) compared to a loss of Rs3,442mn in 4QFY24. The same is down by 46% QoQ due to a higher tax charge recorded in this quarter. Earnings are lower than our expectations due to lower-than-estimated sales, according to a report by Topline Pakistan Research.

This takes full-year FY25 earnings to Rs434mn (EPS of Rs0.85) versus a loss of Rs3,331mn in FY24.  To highlight, the company recorded an impairment loss of Rs927mn on its investment in a subsidiary in FY25. Excluding this impact, EPS would have been Rs 1.9 in FY25.

§ Along with the results, the company also declared a bonus share of 15%.

§  SEARL’s net sales decreased by 16% YoY and 5% QoQ to Rs5.6bn in 4QFY25. This takes FY25 sales to Rs24.7bn, down by 4% YoY.

§  Company recorded gross margins of 52.6% in 4QFY25, compared to 50.7% in 4QFY24 and 52.7% in 3QFY25. This results in full-year FY25 gross margins of 50.8%, compared to 48.6% recorded in FY24.

§  Distribution expenses in 4QFY25 increased by 13% YoY and 24% QoQ to Rs2,234mn.

§ Finance cost decreased by 65% YoY and 10% QoQ in 4QFY25 due to declining interest rates coupled with a decrease in borrowing on a YoY basis.

§  Effective tax rate in 4QFY25 stood at 50.6% compared to 8.7% in 3QFY25. In FY25, the company recorded a tax charge of Rs 300 million (ETR: 40.9%) compared to a tax reversal of Rs 1,141 million in FY24.

§  SEARL is currently trading at a FY26E/27F PE of 17.8x/11.7x.