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VICTORY CITY INTERNATIONAL HOLDINGS LIMITED
Announces Annual Results for 2002/2003
Achieving Continuous Growth in Turnover and Profits
Hong Kong, July 8, 2003 - Hong Kong's leading knitted fabric manufacturer, dyeing and finishing services provider, Victory City International Holdings Limited (SEHK: 539) today announces its annual audited results for the year ended March 31, 2003. The Group had yet another remarkable year, registering its fifth successive year of turnover and profits growth. Turnover rose substantially to HK$1.249 billion, representing a 43% increase from a year ago. Net profit surged 174% to HK$92.27 million with basic earnings per share up 131% to HK23.6 cents. The board of directors recommends the payment of a final dividend of HK4.0 cents with script option, which together with the interim dividend of HK3.0 cents per share paid earlier, total dividends for the year ended March 31, 2003 amounted to HK7.0 cents per share, representing 133% increase compared to the previous year.
Mr Chen Tien Tui, Managing Director of Victory City International Holdings Limited noted: "Victory City's success has always built on rational growth of our strong core businesses of fabric production and sales as well as garment trading. With the management's vision to become a vertically integrated dynamic player in the industry, we take on an innovative approach in seeking opportunities to develop complementary businesses. The Group's HK$150 million investment in a new yarn-dyeing facility in our Xinhui factory is one of such endeavours, aiming to provide comprehensive and quality services to our customers and effectively strengthen the Group's position in the textile industry. This new business segment is envisaged to contribute to the Group's stable growth in turnover and profits in the coming years."
The new yarn-dyeing facility located at the Group's Xinhui factory has a monthly production capability of over 3 million pounds and is expected to commence operation in late July 2003.
During the year under review, the Group's turnover in fabric production and sales was HK$765 million, representing a 32% growth comparing to last year. With over HK$56 million investment in upgrading and acquisition of advanced machineries, the Group's Xinhua factory production capability and efficiency has been significantly improved. The Group's fabric production was doubled with a monthly output of 6 million pounds, resulting in a significant contribution to the turnover growth.
Gross profit margin of fabric production and sales also increased to 23.5% from 20.3% last year. This is achieved through the management's continuous cost-cutting efforts including fuel costs saving by utilizing the Group's coal-fired facility, implementation of various measures to increase productivity and its ability to leverage on economies of scale.
The forward-looking management's business strategy to develop fabric-related business has proved to be a success. The Group's garment trading operations achieved a turnover of HK$484 million, representing a 65% growth comparing to last year. The substantial turnover growth in garment trading is the result of the dedicated efforts of the sales team and its success in providing direct sales services under the landed-duty-paid progammes to the reputable buyers in US and Canada which also allows the Group to enjoy higher profit margins.
Looking ahead and riding on the sustained market demand for knitted fabric, the Group also plans to fuel further growth in this area by increasing its monthly production capacity to 9 million pounds by mid 2004.
The Group's recent success in raising new source of funds in the form of a HK$288 million 3.5 year syndicated loan at a very competitive interest rate of HIBOR+0.7% p.a. margin will complement and provide the financial backing to the Group's numerous expansion plans and development strategies that are in the pipeline which most certainly will enhance the market position of the Group.
"The Group has achieved encouraging results in our endeavour to provide efficient and effective one-stop integrated services to our customers. We are committed to the growth strategy of vertically integrating our operations with continuous development of our core business. Well equipped and prepared to face the challenge ahead, the Group is confident that with its targeted growth in knitted fabric production and sales, yarn-dyeing business and garment apparels trading well on track, the Group is well positioned to capture market opportunities and will be able to reward its shareholders with returns in line with market expectation," concluded Mr Li Ming Hung, Chairman of Victory City International Holdings Limited.
Financial Highlights| Year ended March 31, | ||
| 2003 | 2002 | |
| HK$ '000 | HK$ '000 | |
| Turnover | 1,249,029 | 872,572 |
| Profit from operating activities | 128,453 | 47,198 |
| Net profit attributable to shareholders | 92,268 | 33,683 |
| Earnings per Share | ||
| - Basic | HK23.6 cents | HK10.2 cents |
| - Diluted | HK21.4 cents | HK8.3 cents |
| Final dividend per share | HK4.0 cents | HK3.0 cents |
| Full-year dividend per share | HK7.0 cents | HK3.0 cents |
About Victory City
Victory City International Holdings Limited (SEHK: 539) is one of Hong Kong's major manufacturers of knitted fabric with production facilities in Xinhui City, Guangdong Province covering an area of over 7 million square feet. The Group's principal business operations are in the areas of fabric knitting, dyeing and finishing services, sales of finished knitted fabric and trading of garment products.
Issued by :
Victory City International Holdings Limited
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Stella To or Frances Lam
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