GROUP FINANCIAL HIGHLIGHTS
|
RESULTS
The directors of Yue Yuen Industrial (Holdings) Limited (the "Company") are pleased to announce the audited results of the Company and its subsidiaries (collectively referred to as the "Group") for the year ended 30th September, 1999 with comparative figures as follows:
1999 1998
US$'000 US$'000
Turnover 1,484,063 1,430,304
========== =========
Operating profit 196,729 173,350
Share of profit of an associated company 1,080 -
Share of profits of jointly controlled entities 3,146 2,636
---------- ---------
Profit from ordinary activities before taxation 200,955 175,986
Taxation (note 1) 5,725 4,143
---------- ---------
Profit before minority interests 195,230 171,843
Minority interests (12) 533
---------- ---------
Profit attributable to shareholders 195,242 171,310
Dividends (note 2) 71,655 51,981
---------- ---------
Profit for the year, retained 123,587 119,329
========== =========
Earnings per share (note 3)
- basic 29.1 cents 25.6 cents
========== =========
- diluted 28.0 cents 24.6 cents
========== =========
Notes:
1. TAXATION
1999 1998
US$'000 US$'000
The charge comprises:
Hong Kong Profits Tax calculated at 16% of
the estimated assessable profit for the year 90 121
Overseas taxation 5,566 4,044
Share of taxation of an associated company 84 -
Deferred taxation (15) (22)
-------- --------
5,725 4,143
======== ========
A substantial portion of the Group's profits neither arose in, nor was derived from, Hong Kong and therefore was not subject to Hong Kong Profits Tax.
Overseas taxation is calculated at the rates prevailing in the respective jurisdictions.
2. DIVIDENDS
1999 1998
US$'000 US$'000
Interim dividend of 25 Hong Kong cents per share
(1998: 20 Hong Kong cents per share) 21,659 17,327
Proposed final dividend of 55 Hong Kong cents per share
(1998: 40 Hong Kong cents per share) 49,996 34,654
------- -------
71,655 51,981
======= =======
The amount of the final dividend proposed for the year ended 30th September, 1999 has been calculated by reference to 705,669,953 ordinary shares in issue as at the date of this report.
3. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share for the year is based on the following data:
1999 1998
Earnings:
Profit attributable to shareholders and earnings
for the purposes of basic and diluted
earnings per share US$195,242,000 US$171,310,000
============== ==============
Number of shares:
Weighted average number of ordinary shares
for the purposes of basic 670,382,953 670,382,953
earnings per share
Effect of dilutive potential ordinary shares
- share options 26,448,302 24,798,279
-------------- --------------
Weighted average number of ordinary shares
for the purposes of diluted
earnings per share 696,831,255 695,181,232
============== ==============
CLOSURE OF REGISTER OF MEMBERS
The Register of Members of the Company will be closed from 8th March, 2000 to 15th March, 2000, both days inclusive, during which period no transfer of shares will be effected. All transfers, accompanied by the relevant share certificates, must be lodged with the Company's Branch Share Registrars, Secretaries Limited, at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not later than 4:00 p.m. on 7th March, 2000 in order to qualify for the final dividend mentioned above.
BUSINESS REVIEW AND PROSPECTS
Results
Turnover for the year ended 30th September, 1999 was US$1,484 million compared to US$1,430 million in the previous year, an increase of 3.8%. Profit attributable to shareholders was US$195 million, representing a 14% growth over the previous corresponding period. Earnings per share were 29.1 US cents as against 25.6 US cents in 1998.
Recovering market environment
During the year of 1999, the athletic footwear industry has gradually recovered from the slowdown in 1998 when the branded athletic footwear market suffered a 10% decline at the wholesale level primarily due to a backlog of wholesale inventory in 1997 and 1998. The market bottomed out in 1999 following a reduction in inventory at the wholesale level. We expect a continuous recovery in the year of 2000.
Geographical market
Sales to the U.S. market during the year accounted for 61% of total turnover, compared to 64% in 1998. Europe, on the other hand, has increased its share of total turnover from 16% to 20%, reflecting a continuous growth over the last two years. Sales to Asia remained at 13% of total turnover of the Group.
Production volume and categories
Total production volume reached 87.8 million pairs during the year compared to 78.2 million pairs in the previous year, an increase of 12%. In terms of product categories, athletic shoes achieved a rebound, accounting for 78% of total turnover (1998:73%). Casual shoes decreased their share of turnover to 13% (1998:18%) whilst, sole and other components remained at 9% of total turnover of the Group.
Diversified production bases
As of September 1999, the Group had 182 production lines located in China (136), Indonesia (27) and Vietnam (19). This represents an increase of 13 production lines from the previous year. In response to customer needs, the Group has planned to expand production facilities in these countries in the coming years.
Controlling costs
The Group has worked hard to control costs and to increase efficiency. Inventory turnover in days has further reduced from 45 days in 1998 to 41 days in 1999. This has been achieved by better management of procurement systems and shorter lead time to delivery in response to market trend. Production volume increases have also meant better utilization of facilities and the advantage of economies of scale.
Financial stability
The Group has a strong financial position derived from its steady growth of business and conservative approach to financial planning. As at year end date, the Group had US$171 million cash on hand and the total borrowing was US$273 million representing a net debt to equity ratio at 13%, down from 32% in 1998. Meanwhile, the Group was able to bring down capital expenditure to US$95 million in 1999 (representing a reduction of about 50% as against 1998). The interest coverage ratio of the Group's profit before interest, tax, depreciation and amortization (EBITDA) to total net interest expense was 24.6 times, up from 14.5 times in 1998. Return on equity was at 25% in 1999 (1998:26%).
Corporate social responsibility
The Group has continuously engaged in social responsibility programs to ensure staff welfare and, a healthy and safe working environment as well as care to the community as a whole. The Group has set up a Committee to oversee these activities and evaluate performance. Extensive educational programs have been provided to staff to enhance their vocational and self-development skills and knowledge. Its medical center in Dongguan, Guangdong has passed ISO9002 evaluation during the year. The Group has also participated in several community charity and disaster relief programs.
Future prospects
We expect a continued but gradual return to growth in the footwear industry. Plans to satisfy future increase in market demand are currently being implemented. The Group raised approximately US$85 million net proceeds by a placing of 35 million new shares in October 1999. The proceeds will be used to fund an expansion in production facilities as well as possible acquisitions and joint venture projects in footwear related businesses, which are now under negotiation.
THE YEAR 2000 ISSUE
The Group defines "Year 2000 Compliant" as the performance and functionality of its computers and automatic control systems, which operate by using dates, not being affected by dates prior to, during and after the year 2000.
The Group is fully aware of the importance of the Year 2000 Compliance. There could be an adverse impact on the Group if its computer systems do not function properly with respect to date-related data in the year 2000 and beyond. Therefore a Y2K Committee has been organised and formed to lead the Year 2000 compliance programme.
Under the programme, a review has been completed to identify the software and hardware of the Group that may be subject to the Year 2000 problem. Modification, replacement and upgrading of these software and hardware have been processed on schedule and all the major work necessary to achieve compliance was completed by the end of July 1999. The Group is pleased that the business and operations of the Group have smoothly crossed the new year days of the Year 2000.
Total costs for the compliance programme, including modification and replacement of software and equipment, are approximately US$1.43 million. Costs related to modification and conversion have been charged to the profit and loss account as incurred, while costs of replacement and new software have been capitalised and depreciated in accordance with the Group's accounting policies.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
During the year, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities.
RESIGNATION AND APPOINTMENT OF DIRECTORS
The directors of the Company announce that Mr. Henry Cornell resigned as a non-executive director of the Company on 21st January, 2000. The directors extend their appreciation to Mr. Cornell for his past contribution to the Company.
The directors are also pleased to announce that Mr. Yang Xiang-Dong was appointed as a non-executive director of the Company with effect from the same date.
ACKNOWLEDGEMENT
I would like to take this opportunity to express our sincere appreciation of the support from our customers, suppliers and shareholders. I would also like to thank my fellow directors for their valuable contribution and the staff members of the Group for their commitment and dedicated services throughout the year.
By Order of the Board
Tsai Chi Neng
Chairman
Hong Kong, 21st January, 2000
Web Site: http://www.irasia.com/listco/hk/yueyuen
| © Copyright 1996-2008 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com 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 irasia.com Ltd or have been lawfully licensed to irasia.com 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 irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |