⚡ Flash Summary

Leather Up Limited reported a challenging financial year ending June 30, 2025. The company experienced a significant decrease in sales revenue, leading to a substantial net loss. The statement of financial position shows a decrease in total assets and total equity and liabilities. The negative profit per share raises concerns about the company’s profitability.

📌 Key Takeaways

• 📉 Sales revenue decreased by 56.1% from Rs 27,525,256 in 2024 to Rs 12,086,203 in 2025.
• 💔 Gross profit turned into a gross loss of Rs 1,199,957 in 2025 compared to a profit of Rs 6,276,599 in 2024.
• 😟 Operating loss significantly increased to Rs 4,987,519 in 2025 from Rs 90,821 in 2024.
• ⛔ Loss before taxation was Rs 4,508,641 in 2025, compared to a profit of Rs 321,682 in 2024.
• ❌ Loss after taxation was Rs 4,508,641 in 2025, a sharp decline from a profit of Rs 321,682 in 2024.
• 📉 Loss per share was Rs 0.75 in 2025, compared to earnings per share of Rs 0.05 in 2024.
• 📉 Total assets decreased from Rs 28,465,209 in 2024 to Rs 21,930,590 in 2025.
• 📉 Stock-in-trade decreased significantly from Rs 17,840,117 in 2024 to Rs 10,342,437 in 2025.
• ⬆️ Actuarial gain on defined benefit increased slightly to Rs 123,662 in 2025 from Rs 144,599 in 2024.
• ⬇️ Accumulated losses increased from Rs 44,468,647 in 2024 to Rs 48,977,289 in 2025.
• ⬇️ Total equity and liabilities decreased from Rs 28,465,209 in 2024 to Rs 21,930,590 in 2025.
• 💸 Net cash used in operating activities was Rs 561,350 in 2025, compared to cash generated of Rs 1,427,613 in 2024.
• Loan from directors decreased from Rs 88,600 to Rs 33,600.
• Trade and other payables decreased from Rs 6,022,104 to Rs 3,704,737.

🎯 Investment Thesis

Based on the analysis, a SELL recommendation is appropriate for Leather Up Limited. The company’s poor financial performance, negative profitability, and declining assets raise significant concerns about its ability to generate returns for investors. A price target of Rs 2.00 is set, based on the current distressed financial state and potential for further decline. This recommendation has a short-term time horizon of 6 months, reflecting the urgency of addressing the company’s financial issues.

⚡ Flash Summary

Leather Up Ltd. reported a significant downturn in its financial performance for the fiscal year ended June 30, 2025. The company experienced a substantial decrease in sales revenue and a shift from profit to loss compared to the previous year. Key performance indicators such as earnings per share (EPS) deteriorated significantly, and operating losses widened. The company attributes this decline to challenges in export markets, particularly in Europe, and the adverse impact of high inflation. Management expresses concerns about going concern status, signaling substantial uncertainty.

📌 Key Takeaways

• 📉 Sales plummeted to Rs 12.09 million in 2025 from Rs 27.53 million in 2024.
• 🙁 The company incurred a loss before taxation of Rs 4.32 million in 2025 compared to a profit of Rs 0.57 million in 2024.
• ⚠️ EPS nosedived to a loss of Rs 0.75 per share in 2025 from a profit of Rs 0.05 per share in 2024.
• 🚫 No dividend was announced due to the losses incurred.
• 🌍 Management attributes the decline to recession in Europe and high inflation.
• ✂️ Efforts are being made to cut operating expenses to withstand the lean period.
• ✅ Export orders worth Rs 22 million have been secured in the first quarter of 2026, a positive signal.
• 🤝 One executive director has agreed to forgo remuneration to support the company.
• 🗓️ Share transfer books will be closed from October 21 to October 28, 2025.
• ✉️ Members can participate in the Annual General Meeting through video link facility.
• 🎁 No gifts will be distributed during the Annual General Meeting.
• 🌐 Financial statements are available on the company’s website.

🎯 Investment Thesis

Given the significant deterioration in financial performance, high risks, and going concern uncertainty, a SELL recommendation is warranted. The negative trends in revenue, profitability, and EPS, coupled with the challenging economic environment, make the investment unattractive. A price target cannot be established due to the lack of profitability and high uncertainty.