| 2006-8-8 |
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LUK FOOK HOLDINGS (INTERNATIONAL) LIMITED
ANNOUNCES ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2006
NET PROFIT DECREASED BY 23.9% TO HK$95,695,000
FINAL DIVIDEND WILL BE 7 HK CENTS PER SHARE
(Hong Kong, 24 July 2006) --- Luk Fook Holdings (International) Limited (“Luk Fook” / “The Group”) (SEHK Code: 590) today announced its annual results for the year ended 31 March 2006. For the year under review, turnover was approximately HK$2,126,297,000 representing an increase of 8.4% when compared with HK$1,961,720,000 of the corresponding year. Profit attributable to shareholders was approximately HK$95,695,000 representing a decrease of 23.9% (2005: HK$125,795,000). Earnings per share were approximately 19.7 HK cents (2005: 26.1 HK cents).
The Directors proposed the payment of a final dividend of 7 HK cents per share (2005: 6 HK cents). Together with the interim dividend of 3 HK cents per share already paid, it gives a total of 10 HK cents per share for the year ended 31 March 2006 (2005: 12 HK cents per share, including a special dividend of 2 HK cents).
The Group ‘s total turnover increased approximately 8.4% as compared with that of the previous year. Turnover in the retail sector decreased approximately 1.5% while turnover in the wholesale sector increased approximately 36.5% owing to substantial increase in the quantity of gold jewellery items purchased by the Group from retail customers and then resold to gold merchants in bulk quantities, as a result of drastic surges in gold prices during the second half of the financial year. The profit attributable to shareholders for the year ended 31st March 2006 in respect of normal operations decreased approximately 4.6%, as compared with the profit for the previous year excluding the exceptional gain on disposal of properties amounted to approximately HK$25 million for that year.
Mr. Wong Wai Sheung, Chief Executive of the Group said, “I am glad that the Group accomplished growth in turnover for the year 2005/2006. During the first half of the financial year ended 31st March 2006, severe weather conditions adversely affected the traffic of PRC tourists and the shopping appetite of consumers. During the second half of the year, retail sales improved owing to the increase in demand for jewellery products stimulated by the favorable marriage year and helped the Group achieved the satisfactory performance”
Overall, the year ended 31st March 2006 proved to be a challenging year to the Group, with the rental levels of the Hong Kong shops reached its record high. During the year under review, the monthly shop rentals of several tenancy agreements renewed by the Group were greatly raised attributable to the “Disney bubble” effect. Hence, total rental expenses for the year increased approximately 35.8% and accounted for approximately 4.3% of total turnover. However, equipped with long-established relationships with the landlords and proven track records, the Group still managed to minimize the impact through successful negotiation for more favorable shop rental.
At present, Luk Fook has 30 retail outlets under the brand name of Luk Fook and 2 under the brand name of Ice g. in Hong Kong, Macau, the PRC and Canada.
Besides, during the year under review, the corporate governance of Luk Fook gained the recognition from Forbes. The Group was identified by Forbes Magazine as one of the 200 Asia Pacific’s best small and medium-sized enterprises (under 1 billion in revenues). Luk Fook was the only jewellery retailer who gained this award. This revealed Luk Fook’s superior position as well as its high-quality corporate governance.
During the year under review, the Group continues to provide technical support and consultancy services to the licensee shops in the PRC. Besides, to further expand the overseas market, the Group set up a new brand “Luvina Jewelers” during the year, aiming to attract those relatively mature overseas clients who are with higher consumption power.
In the aspect of brand building, the Group was awarded the title in the 3rd “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 popularity in the PRC. During the year, the Group continued to join various promotional activities such as being the sole gold and diamond sponsor of Miss Hong Kong Pageant for 8 consecutive years, sponsoring Miss Asia Pageant and other beauty contests in Guangzhou, Vancouver and Toronto. The Group was also the title sponsor of Miss Sun Yan Zi’s concert and participated in a number of large-scale exhibitions and international jewellery promotions.
As in the past, the Group actively participated in many different international jewellery design competitions and gained excellent results. During the year under review, the Group’s designs were highly appraised, winning a total of 16 awards in the competitions. For example, the Platinum Guild Jewellery Masterpiece “Jiang”; 3 Champions, first prize and second prize in the 4th Tahitian Pearl Trophy Asia; “Craftsmanship and Technology Award” and 4 Merit Awards in the 7th Hong Kong Jewellery Design Competition as well as “Buyer’s Choice Winner” in the Chuk During the year under review, the Group continued to produce a portion of its gold ornaments and gem-set jewellery in its production facilities in Hong Kong and the PRC. With an area of approximately 300,000 square feet, the plant has strengthened its production capacity since it commenced production in the fourth quarter 2004. The production capacity is targeted to triple the previous production capacity.
Mr. Wong said, “With the macro economic environments turning better, we will continue to expand our business, seeking high-consumption areas to open new shops. In May, 2006, we newly established a new self-operated shop in Sun Dong An Plaza in order to grasp the business opportunities brought by the 2008 Olympics games as well as to enlarge our brand effect. In the second half of the year, we will also open the new shop of Luk Fook in San Jose of US, aiming to enhance Luk Fook to an international brand.”
“Looking forward, we are very optimistic towards the retail market of Hong Kong and so we hope to further expand our sales network. At the same time, making Luk Fook an even more popular and renowned brand through our trendy jewellery design and good quality management in order to bring a promising return to the Group as well as our shareholders.” Mr. Wong concluded.
About Luk Fook Holdings (International) Ltd.
Luk Fook is principally engaged in the sourcing, designing and retailing of a variety of gold jewellery, gold ornaments, gem-set jewellery, gemstones and other accessory items. As at the announcement date, the Group has 30 retail outlets under the brand name of Luk Fook, and 2 under the brand name of Ice g., in Hong Kong, Macau, the PRC and Canada. The number of licensee shops of the Luk Fook brand has increased to over 200 in the PRC.
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