During the period, knitted fabric and dyed yarn production and garment segments contributed 68% and 32% respectively of group turnover.
Production and sales of knitted fabric and dyed yarn remained the Group's principal operation with segment revenue reaching HK$1.24 billion, signifying an increase of 31% as compared with the previous period. The growth was mainly attributable to enhanced utilization rates as well as the gradual expansion of monthly production capability of knitted fabric from 12 million pounds to 15 million pounds during the period under review.
Improvements of production efficiency and product quality were achieved through investments in up-to-date models of machineries. Furthermore, the dedicated effort of the marketing teams in exploring both worldwide and domestic China markets and the management's tightened control of operating costs also contributed to both revenue and profit growth. It is envisaged that the growth momentum will be sustained in the second half of the financial year.
Mr Chen Tien Tui, Chief Executive Officer of Victory City International, said: "Recently, the PRC authorities have enforced tightened measures on environmental protection. Our Xinhui factories are well-equipped with sufficient and up-to-standard effluent discharge facilities for the manufacturing operations. To cater for our future capacity expansion, further enhancement and upscaling of the effluent discharge facilities including installation of new water recycle system and effluent treatment plant have been implemented by phases."
The garment segment continued to demonstrate satisfactory performance during the period under review by achieving a 22% growth in revenue to HK$585 million. With a diversified global out-sourcing base, as well as self-owned garment manufacturing facilities in Jordan, PRC and Indonesia, the Group is able to provide comprehensive services to its customers through flexible and efficient production plans and diversified product ranges. The management is confident that the garment business will continue to play an important role in the corporate development of the Group in the coming years.
Mr Andy Li, Chairman of Victory City added: "It is anticipated that the global trading environment will remain highly competitive with continuing pressures on operating costs. We remain cautiously optimistic towards the second half of the financial year as our business developments are on the right trajectory. The vertical set-up of the Group from yarn dyeing, knitted fabric manufacturing to garment sourcing, manufacturing and exporting laid down strong foundation for future business growth. We are well-positioned to excel and to capitalize on any strategic opportunities that fit our corporate vision so as to maintain our uninterrupted record of growth for our shareholders."
Financial Highlights| Six months ended September 30, | ||
| 2006 | 2005 | |
| HK$ '000 | HK$ '000 | |
| Turnover | 1,821,174 | 1,421,345 |
| Profit from operating activities | 222,983 | 160,314 |
| Net profit attributable to shareholders | 156,367 | 122,390 |
| Basic earning per share | HK23.4 cents | HK26.1 cents |
| Interim dividend per share | HK7.2 cents | HK6.5 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-sq-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. The Company was named by Forbes as one of the "Best 200 Under a Billion" companies of 2006.