2005-7-22
LUK FOOK HOLDINGS (INTERNATIONAL) LIMITED
ANNOUNCES ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2005
NET PROFIT INCREASED BY 63.7% TO HK$125,988,000
Luk Fook Holdings (International) Limited ("Luk Fook" / "The Group") (SEHK Code: 590) today announced its annual results for the year ended 31 March 2005. For the year under review, turnover was approximately HK$1,961,720,000 representing an increase of 22.8% when compared with HK$1,598,123,000 of the corresponding year. Profit attributable to shareholders was approximately HK$125,988,000, representing an increase of 63.7 % (2004: HK$76,965,000). Earnings per share were approximately 26.1 HK cents (2004: 16.1 HK cents).
The Directors proposed the payment of a final dividend of 6 HK cents per share (2004: 5 HK cents) and a special dividend of 2 HK cents per share (2004: 0 HK cents). Together with the interim dividend of 4 HK cents per share already paid, it gives a total of 12 HK cents per share for the year ended 31 March 2005 (2004: 7 HK cents per share).
Mr. Wong Wai Sheung, CEO of the Group commented, " I am pleased that the Group accomplished record-high results both in turnover and net profit for the year ending 31 March 2005. It was due to the resilient local consumer confidence, improving employment conditions, vibrant inbound tourism as well as our effort in strengthening our brand awareness both in our principal market Hong Kong and the PRC."
At present, Luk Fook has 28 retail outlets under the brand name of Luk Fook and 4 under the brand name of Ice g. in Hong Kong, Macau, the PRC and Canada.
Jewellery is getting more fashion oriented. In order to move up-market, the Group has put much effort on the enhancement of design technique and craftsmanship and also established its foothold in Hong Kong's the busiest commercial, financial and tourism district, Central where is the chosen district for international branded shops in January 2005.
During the year under review, the Group's newly built manufacturing base in Panyu, Guangdong has commenced production. The new plant is sized of approximately 350,000 square feet and is expected to achieve the objective of vertical integration for cost efficiency.
Apart from the continue enhancement of the foothold of its present in the PRC through the licensee shops, the Group opened its retail shops in prominent cities for the year under review. It opened its own retail outlet in Guangzhou and Beijing in September 2004 and January 2005 respectively. At present, the number of licensee shops of the Luk Fook brand has increased to over 145 in PRC.
In addition, the Group was awarded the title in the 2nd "Sincere Trademark of Hong Kong" and "My Most Favorite Top 10 Brands of Hong Kong" which were organized by the reputable Guangzhou Daily in China. The credits demonstrated the Group's market position in the PRC.
In January 2005, the Group has been accredited "Hong Kong Top Brand Awards 2004" which was organized by the Chinese Manufacturers¡¦ Association of Hong Kong. There are totally 10 brand names accredited and Luk Fook is the only accredited jeweler in 2004. Also, it attainted the "Superbrands" award for 2005 / 2006 in June 2005.
The Group's in-house gems laboratory namely "China Gem Laboratory Limited" has successfully attained the ISO17025 qualification. Being the first jeweller in Hong Kong has such honour, it revealed that Luk Fook's professional authentication system has been recognized, thus the quality control of the Group is enhanced and the quality is guaranteed.
Mr. Wong said, "we are optimistic of the future development of the Group. The opening of Hong Kong Disneyland in September will become an icon for Hong Kong's tourist spot. We will continue to expand the network by seizing prime locations for shops."
Looking ahead, it actively participates in more international competitions or industry fairs as well as exhibitions. Meanwhile, the Group will further promote the Ice g. collection and endeavor to build a brand recognizable by young consumers through offering fair price yet high quality and delicate jewelry products.
According to the Hong Kong Trade Development Council, the sales of jewellery recorded an annual growth rate of 15.7% in the PRC market. The jewellery market is expected to reach RMB150 billion in the year 2010. The Hong Kong Tourist Board estimated that jewelry represented 18% of tourist expenditure in 2003. Just considering the spending of mainland tourists, the proportion was 24%. A recent survey conducted by the HKTDC shows that Hong Kong brands are indeed the most favourite jewellery brands among urban shoppers in the Chinese mainland, when compared with local and foreign brands. With competitive advantages over foreign jewelers in terms of reputation, services and product quality, the Group believes that its business will expand rapidly in the PRC.
The Group continues to provide technical support and consultancy services to franchise jewelers in the PRC, with an aim to penetrate into the PRC market. Also, leveraging on the strong production support in Panyu, the PRC, the Group plans to explore wholesale business opportunity in the foreseeable future.
Eyed the simplified traveling procedures and the opening of gambling industry as well as several development projects in pipeline, Macau is already turned to be another famous tourist spot for mainland visitors. Leveraged on the boom of Macau and the outstanding performance of the 1st retail outlet in Macau, the Group will be encouraged to open its second retail outlet in Macau by August 2005, being the stepping-stone for further penetration to Macau market.
The Group has successfully penetrated into the overseas market. Following the Canada market, the Group plans to open retail outlets in New York, Las Vegas and Southeast Asia in the future, aiming to attract more overseas Asian clients and upgrade Luk Fook to be a global brand.
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