Hong Kong, July 12, 2006 - Hong Kong's leading knitted-fabric manufacturer Victory City International Holdings Limited (HKEx: 539) today announces that, for the year ended March 31, 2006, the Group achieved record turnover and earnings for the eighth consecutive year. During the year, the Group posted a total turnover of HK$2.8 billion, representing a steady increase of 18%. Operating profit was also surged to HK$337.8 million with net profit growing substantially by 23% to HK$250.3 million. Basic earnings per share increased from HK36.1 cents to HK43.4 cents in the reporting year. The Group declared a final dividend of HK6 cents per share which, together with the interim dividend of HK6.5 cents, represents a 13.6% increase in full-year payout of HK12.5 cents.
Mr Chen Tien Tui, Managing Director of Victory City International, noted: "Over the past years, we have experienced satisfactory business growth, and the financial year under review continued our trajectory, propelled by the success of each of our business. Although facing with various crucial conditions including the increase in fuel and finance costs, trade disputes between PRC and United States and European countries and pressure on general expenses exerted by Reminbi appreciation, our results for the past twelve months were still encouraging."
Production and sales of knitted fabric and dyed yarn remained as the principal operation of the Group and accounted for 64% of the consolidated revenue. Enhanced monthly production capability together with the dedicated effort of the marketing teams contributed to the turnover growth. Improvements in production efficiency and product quality through the Group's investment in most advanced machineries together with incessant cost controls contributed to the profit growth. Gross profit margin for the textile segment increased from 22.6% in 2005 to 24.4% in 2006.
The garment segment continued to demonstrate satisfactory performance during the year under review by achieving a 44% growth in revenue to HK$1.0 billion. During the year, the Group has established garment manufacturing facilities in Jordan, PRC and Indonesia throughout the year. The Group is well-positioned to capitalise on the core strength of multi-location production capacities with flexible and effective production planning.
The clearance of textile and garment uncertainties through the signing of trade agreements between PRC and United States and European countries provided steady and predictable growth for the export of Chinese textile products. It is anticipated that PRC will inevitably emerge as the largest exporter of textile products. Apart from that, the continuous economic growth in PRC together with improvement in living standards of residents boosts more purchasing demand for garment apparels. Notably, orders from PRC branded customers have been increasing substantially throughout the year. The Group is well-positioned to increase our domestic market share in PRC.
To cope with both the export and domestic growing demand of our quality fabric, the Group is to increase the monthly production capacity of knitted fabric from 12 million pounds to around 15 million pounds by end of July 2006.
"Throughout years of well-established strategies, Victory City has grown into a dynamic vertical set-up, from yarn dyeing, knitted fabric manufacturing to garment sourcing, manufacturing and exporting, providing customers with comprehensive and integrated services." said Mr Chen.
As at March 31, 2006, the Group had total assets of HK$3,638,188,000 (March 31, 2005: HK$2,583,256,000), and maintained current and gearing ratios of 1.5 (March 31, 2005: 1.9) and 57% (March 31, 2005: 76%) respectively.
Financial Highlights| Year ended March 31, | ||
| 2006 | 2005 | |
| HK$ '000 | HK$ '000 (restated) |
|
| Turnover | 2,833,111 | 2,403,384 |
| Profit from operating activities | 337,794 | 253,652 |
| Net profit attributable to shareholders | 250,269 | 202,655 |
| Earnings per Share | ||
| - Basic | HK43.4 cents | HK36.1 cents |
| - Diluted | HK43.3 cents | HK35.7 cents |
| Final dividend per share | HK6.0 cents | HK5.5 cents |
| Full-year dividend per share | HK12.5 cents | HK11.0 cents |
About Victory City
Victory City International Holdings Limited (HKEx: 539) is one of Hong Kong's major manufacturers of knitted fabric with an approximately 10-million-square-ft production facilities in Xinhui City, Guangdong Province. The Group's principal operations include production and sale of knitted fabric and dyed yarn, and manufacturing and trading of garment products.