Revenue Falls While Higher Costs Weigh On FY26 Earnings
Security Papers Limited (SEPL) reported a 40.5% decline in profit for the financial year ended June 30, 2026, as lower revenue and shrinking gross margins weighed on the company’s performance.
The company posted a profit of Rs907.16 million, down from Rs1.52 billion recorded in the previous year. Earnings per share (EPS) also dropped to Rs15.31 from Rs25.72.
Despite the weaker financial results, the Board of Directors recommended a final cash dividend of Rs9 per share (90%), maintaining a strong shareholder payout.
Revenue And Margins Under Pressure
Revenue from contracts with customers declined by 7.2% to Rs7.31 billion compared with Rs7.87 billion a year earlier.
Meanwhile, cost of sales increased slightly, resulting in a 28% decline in gross profit to Rs1.59 billion from Rs2.20 billion.
Administrative expenses recorded a modest increase, while other income fell significantly to Rs688 million from Rs916 million. Finance costs also more than doubled during the year, although they remained relatively low in absolute terms.
Major Capital Investment Strengthens Asset Base
Security Papers significantly expanded its capital base during FY26 through heavy investment in fixed assets.
Property, plant and equipment more than doubled to Rs4.47 billion from Rs2.00 billion, reflecting substantial capital expenditure during the year.
Trade debts declined sharply to Rs542 million from Rs1.30 billion, while total assets increased to Rs12.11 billion.
The company’s equity also strengthened to Rs9.38 billion from Rs9.00 billion, supported by transfers to general reserves.
Dividend And Annual General Meeting Schedule
The Board recommended a final cash dividend of Rs9 per share for shareholders whose names appear on the register by September 18, 2026.
Share transfer books will remain closed from September 19 to September 25, 2026.
The company’s Annual General Meeting (AGM) is scheduled for September 25, 2026, at 9:00am at its premises in Malir Halt, Karachi. The annual report will be transmitted separately through PUCARS.
Company Secretary Steps Down
Security Papers also announced that Mr Yasir Ali Quraishi, Company Secretary and Chief Legal Officer, has resigned from his position.
His resignation will take effect from the close of business on August 12, 2026.
Operating Cash Flow Remains Positive Despite Higher Capex
Despite weaker profitability, operating cash flow remained healthy at Rs1.24 billion during FY26.
However, heavy capital expenditure amounting to Rs2.76 billion on plant and equipment resulted in a net decline in cash and cash equivalents by the end of the financial year.