TTK Prestige said that its UK subsidiary Horwood Homewares (HHL) entered into firm agreements to end the joint venture (JV) Horwood Life with Ecosoul Life by divesting its 51% stake in the joint venture.
The company said that this decision had been taken by HHL in the light of long-term uncertainty over supply-chain constraints.
"While there will be onetime impairment to the extent of GBP 869,000 in the books of HHL on account of this exit, HHL will be saving significant recurring overheads from second half of FY 21 thus improving its operating profits, TTK Prestige said in a statement.
It further said that HHL, on its own, was already in the process of building alternate supply chains (including India sourcing) for part of the products that were originally proposed to be sourced from the JV.
Given the size of the subsidiary, the impact due to this exit will not be material with respect to sales revenue or to total assets / liabilities of the subsidiary HHL and to that of the company's consolidated financials, the kitchen appliances maker added.
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TTK Prestige manufactures kitchen appliances and cookware, under the Prestige brand. The company is best known for its pressure cookers.
Shares of TTK Prestige shed 0.22% to Rs 5830. It traded in the range of 5601.15 and 5862 so far during the day.
The company's consolidated net profit declined by 18.30% to Rs 65.64 crore on a 5% rise in net sales to Rs 636.63 crore in Q2 September 2020 over Q2 September 2019.
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