The Board of Directors of Bossini International Holdings Limited (the "Company") announces the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31 March 2000 as follows:
2000 1999 HK$'000 HK$'000 TURNOVER 1,264,605 1,109,065 Cost of sales (750,060) (667,307) ----------- ---------- Gross profit 514,545 441,758 Other revenues 8,294 8,636 Selling and distribution costs (307,888) (305,606) Administrative expenses (80,463) (83,512) Other operating expenses (39,149) (39,615) ----------- ---------- PROFIT FROM OPERATING ACTIVITIES 95,339 21,661 Finance costs (2,044) (3,125) Share of profits/(losses) of associates (141) 1,374 ----------- ---------- PROFIT BEFORE TAXATION 93,154 19,910 Taxation (Note 1) (13,958) (2,234) ----------- ---------- PROFIT BEFORE MINORITY INTERESTS 79,196 17,676 Minority interests 41 (82) ----------- ---------- NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 79,237 17,594 =========== ========== DIVIDENDS (Note 2) 31,544 8,229 =========== ========== RELEASE FROM REVALUATION RESERVE (Note 3) 404 404 =========== ========== BASIC EARNINGS PER SHARE (Note 4) 28.89 cents 6.41 cents =========== ==========
Hong Kong profits tax has been provided at the rate of 16% (1999: 16%) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of taxation prevailing in the jurisdictions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
2000 1999 HK$'000 HK$'000 Group: Hong Kong 8,336 1,619 Elsewhere 5,622 409 --------- -------- 13,958 2,028 Share of taxation of overseas associates - 206 --------- -------- Taxation charge for the year 13,958 2,234 ========= ========
2000 1999 HK$'000 HK$'000 Interim dividend - 4.5 cents (1999: Nil) per share 12,343 - Proposed final dividend - 7 cents (1999: 3 cents) per share 19,201 8,229 --------- -------- 31,544 8,229 ========= ========
3. Release from revaluation reserve
The revaluation reserve arising from revaluation of fixed assets is realised and transferred directly to retained earnings on a systematic basis, as the corresponding asset is used by the Group. The amount realised is the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost.
4. Basic earnings per share
Basic earnings per share is calculated based on the net profit attributable to shareholders for the year of HK$79,237,000 (1999: HK$17,594,000) and on 274,297,493 (1999: 274,297,493) shares in issue during the year.
Diluted earnings per share has not been calculated for the years ended 31 March 2000 and 1999 as no diluting events existed during these years.
The Board of Directors has resolved to recommend the payment of a final dividend for the year ended 31 March 2000 of 7 cents per share totalling HK$19,201,000. Subject to approval by shareholders at the forthcoming Annual General Meeting, the proposed final dividend will be paid on 5 October 2000.
BUSINESS REVIEW AND PROSPECTS
Since the outbreak of the Asian financial turmoil in 1997, the Group has responded by working to adjust its business strategies, improve operational efficiency and tighten cost control throughout the past two years. This approach has resulted in an increase in productivity. Following the satisfactory results in the second half of the year 1998/1999, the Group has continued to improve its performance, with encouraging increases in both turnover and profits.
Consolidated turnover for the year ended March 31, 2000 increased by 14% from last year's HK$1,109,065,000 to HK$1,264,605,000. Net profit attributable to shareholders was HK$79,237,000, representing a 350% increase over last year. Business growth in the Group's three main business regions, namely Hong Kong, Mainland China and Singapore, improved substantially and was the major source of profit for the Group.
Hong Kong remains the largest market and the biggest profit contributor for the Group. Retail sales amounted to HK$827,594,000 for the year under review, representing a 14% increase from last year. The Group operated 36 outlets in Hong Kong and Macau at the end of the year, compared with 33 outlets last year. In the face of a continuing tough retail environment, the Group still succeeded in recording an increase in business. This was mainly a result of the following major proactive measures implemented to consolidate and expand the business during the year:
Realising that the domestic consumer market in Mainland China was still weak, the Group continued to consolidate its business there by reducing the number of outlets from 91 at the end of March 1999 to 64 at the end of March 2000. Resources were focused on directly managed stores, as well as on authorised dealer shops with strong management. Although turnover decreased by 13%, the operating results achieved a turnaround.
The Singapore economy achieved a remarkable recovery during the year, providing a relatively satisfactory environment for the retail industry. Although the Group added only 1 shop during the year, giving a total of 19 stores at the end of the year with total retail area maintained at about last year's level, sales recorded an increase of 37% to HK$132,595,000. This can be attributed to the implementation of a series of strategies to control costs, improve quality and strengthen product mix. Operating profit contributed to the Group recorded a significant increase.
The Group's sales to the authorised dealer in Taiwan was HK$54,839,000, representing a 55% increase from last year. Turnover of products exported to other overseas markets, such as the Philippines, Vietnam and the Middle Eastern countries, showed a sales increase of 46% compared to last year.
Following the recovery of the Asian economy, the Group will proactively expand its business in the major markets. It is expected that the Group's business in Hong Kong, Mainland China and Singapore will continue to record growth in the coming year.
The Group targets to open 4 new retail outlets, increasing the total number of outlets to 40. Prime locations with high pedestrian traffic volumes will be preferred, particularly those offering larger retail space, enabling the display of a wider and more diversified product mix.
Following the launch of a children's footwear range in the autumn of 1999, the Group introduced its new ladies' body wear collection in April 2000. It plans to introduce at least one new product line each year for the next three years to cater for the fast-changing and diverse needs of its customers.
The consumer market in Mainland China shows signs of recovery. The expected entry of Mainland China into the World Trade Organisation in the coming year will bring much more opportunity for development and will benefit the retail industry through a gradual opening of the market. As the Group has already established a sales network which gives it a foothold in this market, it is in a favourable position to grasp opportunities for business expansion quickly as they arise. The Group will start strengthening its retail business in Mainland China, with plans to add 10 outlets in major cities such as Beijing, Shanghai, Guangzhou and Shenzhen.
The Group expects the consumer market in Singapore to continue improving. To implement the Group's sales strategies and to give customers a better shopping environment, the Group plans to open 8 stores with larger space in the coming year. The total number of stores will be increased to 27.
The Group plans to cooperate with the existing authorised dealer in Taiwan to further develop business there. The Group will invest more resources in this market, which is expected to give the Group greater scope for development.
The rapid development of computing and Internet technology offers great opportunities for business development through new channels. The Group employs advanced technology, not only to improve operating efficiency and allow its staff members to share information and resources, but also to expand its business. The corporate web page, to be launched in September 2000, will serve several purposes: to be a communication bridge between the Group and its customers and the public; to provide a new promotional channel for the Group and its products; and ultimately to pave the way for the Group's future entry into e-commerce in order to create new business.
The Group believes that the worst operating period has now passed. With the continued improvement of the Asian economy, the management and all staff members will do their best to strive for better returns for the shareholders in the coming year.
YEAR 2000 COMPLIANCE
All computer systems and equipment of the Group functioned properly during the transition to Year 2000 and no business disruption has been encountered. The costs of the Year 2000 compliance project are properly treated in the financial statements according to the Group's accounting policies.
CLOSURE OF REGISTER OF MEMBERS
The Register of Members will be closed from 7 September 2000 (Thursday) to 18 September 2000 (Monday), both days inclusive, during which period no transfer of shares will be effected.
To qualify for the final dividend, all transfer forms accompanied by the relevant share certificates must be lodged with the Company's Hong Kong branch share registrars, Central Registration Hong Kong Limited of Shops 1712-6, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:00 p.m. on 6 September 2000 (Wednesday).
PURCHASE, REDEMPTION OR SALE OF THE COMPANY'S LISTED SECURITIES
Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the year.
By Order of the Board
Ka Sing LAW
Hong Kong, 22 June 2000
The full text of this announcement will be available on the internet at http://www.irasia.com/listco/hk/bossini.
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