INTERIM REPORT 1997
Results
The Directors are pleased to announce that the Group's unaudited consolidated net profit after taxation and minority interests for the first half year amounted to HK$864.649 million which is 23.97% higher than last year's. Earnings per share were 84.03 cents which is 23.92% above that of last year (1996:67.81 cents).
The Group's unaudited consolidated results for the six months ended 30th June 1997 with comparative figures for the corresponding period in 1996 are as follows:-
Notes:
Interim Dividend
Your Directors have declared an interim dividend of 44 cents per share representing an increase of 10% over 1996 (40 cents).
The interim dividend will be payable on 16th October 1997 to shareholders on the register at the close of business on 15th October 1997. The share register will be closed from 9th to 15th October 1997, both dates inclusive.
Issue of Floating Rate Notes
In March, the Group successfully issued HK$2,000 million 5-year Floating Rate Notes due in Year 2002. The issue was well-received by international and local financial institutions. Fund raised was applied to finance the acquisition of the Entertainment Building.
Investment Properties
Leasing activity for luxury residential properties increases steadily with upward adjustment in rentals. Leasing of Grade A office has also improved especially for office with bigger floor plate. With growing consumer spending resulting from a strong economy, the retail leasing market continues to improve. The Group's investment property portfolio is virtually fully let.
New Developments
In Hong Kong
The Lee Gardens
The occupation permit for The Lee Gardens was issued in June 1997. The Lee Gardens, being a landmark and the tallest building in Causeway Bay, comprising of an area of about 84,000 square metres (900,000 square feet) is about 99% let to multinational corporations and renowned international fashion boutiques, motor showroom and restaurants. Majority of the tenants have moved in while the others are undergoing fitting-out works.
In Singapore
(A) Stratford Court, Upper Changi Road
Todate, over 40% of the total 268 residential units were successfully pre-sold. The Stratford Court has a total gross floor area of 35,976 square metres (387,100 square feet) in which the Group has a 10% interest. This development is scheduled for completion in mid-1999.
(B) Tanjong Rhu
The building plans for this 66,040 square metres (710,929 square feet) residential development in which the Group has a 10% interest, have been submitted for approval.
(C) Sin Ming Avenue
The building plans for this 87,373 square metres (940,570 square feet) residential development are under preparation and will be submitted for approval shortly. The Group has a 10% interest in the project.
In The People's Republic of China
(A) Peace Garden. Shanghai
The occupation permit for Phase 1, consisting of three residential towers with a total gross floor area of 65,828 square metres (708,310 square feet) was issued in May 1997 and units sold were delivered to the buyers. Today, about 40% of one of the three blocks have been sold. The property market in Shanghai remains slow and the Group will closely monitor the market before deciding to proceed on with Phase 2 development.
(B) Grand Gateway, Shanghai
Construction of Phase 1 which comprises of one residential tower and part of the retail podium, is in progress. This development in which the Group has a 15% interest will provide a total gross floor area of about 340,000 square metres (3.66 million square feet) of retail, office and residential space.
Acquisition and Disposal of Properties
1. Entertainment Building
The acquisition of the Entertainment Building was completed on 20 May 1997. This commercial building with a gross floor area of about 14,542 square metres (156,532 square feet) of office space and 5,072 square metres (54,597 square feet) of retail area, is virtually fully let.
2. Cimbria Court
This 2,079 square metres(22,370 square feet) residential development in which the Group has a 50% interest was sold. The sale was completed in March following the issue of the occupation permit.
3. Broadwood Park
Broadwood Park with 62 residential units, was acquired in 1986. Following the acquisition of the Entertainment Building, the Group decided to dispose of Broadwood Park on a strata title basis to swap an older building for a newer investment. 4 units were sold and completed during the first half of the year with another 2 units sold but to be completed later this year.
4. Melville Park, Singapore
All the 1,232 units in this 129,000 square metres (1.39 million square feet) residential project were sold and delivered to the buyers. Profit generated will be distributed as dividend as soon as tax clearance in Singapore is completed.
5. Newton Grove
In July, the Group participated in another joint venture for the development of a residential project at Newton Grove in Singapore. The Group has a 25% interest in this project which has a total gross floor area of 34,920 square metres (375,878 square feet).
Prospects
The change of sovereignty of Hong Kong was a success. As an established international financial centre and an important gateway to China, the demand for quality commercial space and luxury residential units is expected to remain strong. With the acquisition of the Entertainment Building and the completion of The Lee Gardens, the Group's quality rental portfolio is further strengthened and overall rentals are anticipated to improve. Barring unforeseen circumstances, the Group's performance for the second half is expected to be satisfactory.
Purchase, sale or redemption of the Company's listed securities
During the six months ended 30 June 1997, there was no purchase, sale or redemption by the Company or any of its subsidiary companies of the Company's listed securities.
H. C. Lee
Chairman & Managing Director
Hong Kong, 12th September, 1997
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