Legacy Footwear eyes Tk36.6cr boost in annual revenue from China export deal
Following the deal signing, its share price hit the single-day upper limit on Thursday, rising 9.94% to Tk58.60 each
Legacy Footwear, a listed shoe exporter in the tannery sector, has partnered with China's Wenzhou Honshengda Industry Co. Ltd. (HSD) to export 3 lakh pairs of shoes a year, targeting Tk36.6 crore in extra annual revenue.
The strategic business agreement, spanning five years, aims to enhance orders, secure high-quality raw materials, and improve production efficiency, according to a stock exchange filing published today (26 June).
Following the deal with the Chinese firm, the company's share price rose by 9.94% to Tk58.60 on Thursday, hitting the upper circuit limit for the day, according to Dhaka Stock Exchange (DSE) data.
The disclosure said, Wenzhou Honshengda Industry Co. will procure export orders for Legacy Footwear, targeting 3,00,000 pairs of shoes per year, which equates to approximately 25,000 pairs per month.
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The patterned firm will assist in sourcing raw materials that meet agreed quality standards and will provide technical support and skilled technicians to ensure high-quality production.
With the deal, the company projected an incremental net profit increase of approximately 12% to 14% per annum, and it believes that this agreement will have a positive and material impact on its revenue, profitability, and overall export market presence.
Shah Alam Swapan, the company secretary, told TBS, "The Chinese firm has been procuring shoes from Bangladesh for a long time. Now, we signed a deal to export the shoes."
"This deal will greatly help our company in terms of revenue, profitability," he added.
Legacy Footwear's recent financial reports show signs of gradual recovery following a major setback in the 2022–23 fiscal year.
In FY23, the company's total revenue dropped sharply to Tk17 lakh, down from Tk11.99 crore the previous year, mainly due to a steep fall in exports amid the Russia-Ukraine war. Despite the decline, it posted a net profit of Tk45 lakh that year.
In FY24, Legacy reported an improved revenue of Tk2.19 crore and a profit of Tk52 lakh.
For the first nine months of the current fiscal year (July 2024 to March 2025), the company's financials show a recovery in revenue. However, it recorded a net loss of Tk61 lakh, with an earnings per share (EPS) of –Tk0.14, according to its third-quarter report.
In FY24, it had paid a 1% cash dividend only to its general shareholders.
In September last year, Legacy Footwear received approval from the Bangladesh Securities and Exchange Commission (BSEC) to amend the utilisation plan for Tk13.21 crore in funds, aiming to benefit the company and its shareholders.
Under the revised plan, Tk8.21 crore was allocated for working capital and Tk5 crore for investment in DS30 stocks on the capital market. The regulator also extended the deadline for fund utilisation until June.
In May last year, Legacy Footwear resumed its exports and sales operation following the successful renovation of its factory premises and comprehensive overhauling of major machinery and equipment.
It also expanded its footprint in the domestic market through its subsidiary manufacturing unit, Legacy Shoes Limited, established in March last year.
Legacy Footwear is an export-oriented leather shoe manufacturer that was listed on the stock exchanges in 2000.
The company has been in production since 1996. Its factory is situated in Gazipur, equipped with modern machinery of Italian and German origin.
