(Incorporated in Bermuda with limited liability)

For the six months ended 30th September, 1999


The Board of Directors of Texwinca Holdings Limited (the "Company") has pleasure in presenting the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30th September, 1999 as follows :

                                               For the six months ended
                                                    30th September,
                                                    1999         1998
                                      Notes      HK$'000      HK$'000

Turnover                                       1,455,402    1,451,560
                                              ==========   ==========
Operating profit                                 157,867      110,962
Share of profit of
  an associated company                           16,885        8,787
                                              ----------   ----------
Profit before taxation                           174,752      119,749
Taxation                                1
  Group                                          (11,466)      (8,204)
  Associated company                              (1,551)        (725)
                                              ----------   ----------
Profit before minority interests                 161,735      110,820
Minority interests                                     -            -
                                              ----------   ----------
Net profit attributable to
  shareholders                                   161,735      110,820
Less : Interim dividend                          (38,419)     (25,574)
                                              ----------   ----------
Retained profit for
  the period                                     123,316       85,246
                                              ==========   ==========
Earnings per share (cents)              2
  Basic                                             12.7          8.7
                                              ==========   ==========
  Diluted                                           12.5          8.7
                                              ==========   ==========
Interim dividend per share
  (cents)                                           3.00         2.00
                                              ==========   ==========

Notes :

1. Taxation

Hong Kong profits tax is provided at the rate of 16.0% (1998 - 16.0%) on the estimated assessable profits arising in Hong Kong for the period.

Taxes on profits in respect of subsidiaries operating overseas have been calculated at the rates of taxation prevailing in the respective tax jurisdiction in which they operate based on existing legislation, interpretations and practices in respect thereof.

2. Earnings per share

The calculation of the basic earnings per share is based on the net profit attributable to shareholders of HK$161,735,000 (1998:HK$110,820,000) and the weighted average of 1,278,720,104 (1998: 1,279,174,486) shares in issue during the period.

The calculation of the diluted earnings per share is based on the followings :

                                                   Six months ended on
                                                     30th September
                                                   1999            1998

Net profit attributable to shareholders
  (HK$'000)                                     161,735         110,820
                                         ==============  ==============
Weighted average number of shares
  used in calculation of basic
  earnings per share                      1,278,720,104   1,279,174,486
Deemed issue of shares for no
  consideration arising from
  share options                              14,393,465         527,146
                                         --------------  --------------
Weighted average number of shares
  used in calculation of diluted
  earnings per share                      1,293,113,569   1,279,701,632
                                         ==============  ==============


The Board has declared an interim dividend of 3.00 cents per share (1998 : 2.00 cents) for the six months ended 30th September, 1999. The interim dividend will be payable on Thursday, 10th February, 2000 to shareholders registered on the Register of Members at the close of business on Monday, 24th January, 2000.


The Register of Members will be closed from Monday, 17th January, 2000 to Monday, 24th January, 2000 (both days inclusive), during which period no transfer of shares can be registered. In order to qualify for the interim dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company's Registrar in Hong Kong, Tengis Limited at 1601 Hutchison House, 10 Harcourt Road, Hong Kong for registration not later than 4:00 p.m. on Friday, 14th January, 2000.


For the interim period of this year, the Group's turnover and net profit attributable to shareholders increased by 0.3% and 45.9% respectively. The Board recommended an interim dividend of 3.00 cents per share, an increase of 50% over last year's 2.00 cents.

Turnover recorded only a slight growth as a result of lower product prices, yet profit increased significantly due to successful cost control. During the period, our financial policy remained cautious. Inventory turnover days on sales and accounts receivable turnover on sales were at 51 days and 44 days respectively, against last year's 58 days for both. At the end of this interim period, the Group's cash and bank balance amounted to approximately HK$266 million, which was more than the total bank borrowings of about HK$226 million. As the Group has sufficient funds for future development, we do not expect to raise capital or increase bank borrowings in the short term.

The production and sales of knitted fabric business has been stable, with big American retail brandnames continuing to be our major customers. As the Asian economies are improving, we foresee sales to grow in these markets. During the period, the Group had further expanded its factory space and had acquired additional equipment to enhance productivity. The admission of China into the World Trade Organization will open up more opportunities for this business, and the management has set up long term strategies in this aspect.

The retail business of "Baleno" has returned to profit making, and is expanding rapidly. There are about 310 shops in China at present, and about 50 more shops are scheduled to open in the second half year. About one third of these shops, which are mainly in Guangzhou, Shanghai and Beijing, are self-operated. The remaining two thirds are franchised shops, which are spread across the whole country. In Hong Kong, the number of shops has increased from 17 to 21, and more are planned to open. Business developments in other Asian countries are also progressing positively. In view of the economic recovery across Asia, we expect the performance of the retail business will be even better in the coming half year, and turnover for the whole financial year is anticipated to reach HK$1 billion.

As economic conditions in Asia have improved and the American market remains strong, the management is very optimistic about the results of the second half year.


Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the six months ended 30th September, 1999.


The Group recognised the Year 2000 problem (the "Y2K") as a problem related to the two-digit representation of YEAR on computer systems. This storage method may lead to system malfunction as computer attempts to retrieve or process time related information on or after 1st January 2000.

To overcome the problem, the Group has tested, evaluated and enhanced all its inhouse developed systems. For hardware and software systems provided by third parties, the Group has either upgraded or confirmed the Y2K compliance of the systems with the respective suppliers. To further reduce the Group's exposure to the Y2K risk, the Group has enquired all its major business partners as to their readiness to the Y2K problem and prepared a contingency plan as a back-up measure against any unforeseeable risk associated with the Y2K problem.

The total cost spent on the Y2K project was around HK$400,000 and the costs have been reflected as operating expenses in the profit and loss account of the Group.


The Company has entered into a syndicated bank loan agreement which required disclosure in accordance with Practice Note 19 of the Listing Rules of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). Under the loan agreement, the controlling shareholders, the Poon family (Mr. Poon Bun Chak and his family members), are required to maintain controlling interests in the management and hold an aggregate shareholding of not less than 51% of the issued capital of the Company during the tenure of the loan to 27th August 2001. A breach of these criteria in respect of the management and shareholding is considered to be a default under the loan agreement. As at 30th September 1999, no breach of these criteria was noted and the balance remained outstanding was HK$178.8 million, representing 16% of the Group's net asset value (per latest audited annual report).


In accordance with the Code of Best Practice set out in Appendix 14 of the Listing Rules of the Stock Exchange, the Company established an Audit Committee (the "Committee") on 15th March 1999. The members of the Committee comprise the two independent non-executive directors of the Company, Mr. Au Son Yiu and Mr. Cheng Shu Wing.

The terms of reference and duties have been laid down as a guideline for the Committee. The principal duties of the Committee include the review and supervision of the financial reporting process and internal control of the Group. Being a sub-committee of the Board, the Committee reports and makes recommendations to the Board directly.


In the opinion of the directors, the Company has complied with the Code of Best Practice as set out in Appendix 14 of the Listing Rules of the Stock Exchange throughout the accounting period covered by the interim report except that the independent non-executive directors of the Company are not appointed for specific terms. Independent non-executive directors are subject to retirement and re-election at the Annual General Meeting of the Company in accordance with the provisions of the Company s Bye-laws.

By order of the Board
Poon Bun Chak

Hong Kong, 16th December 1999

Source: Texwinca Holdings Limited
  • Interim Reports
  • Company's Index

  • © Copyright 1996-2024 Ltd. All rights reserved.
    DISCLAIMER: Ltd makes no guarantee as to the accuracy or completeness of any information provided on this website. Under no circumstances shall Ltd be liable for damages resulting from the use of the information provided on this website.
    TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to Ltd or have been lawfully licensed to Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of Ltd is strictly prohibited.
    TERMS OF USE: Please read the Terms of Use governing the use of our website.