Mr Chen Ming-hsiung, Mickey, Chairman and Managing Director of Kingmaker Footwear Holdings remarked: “The Group pursues growth from both existing and new customers. First, we constantly analyze our existing customer base in respect of the growth patterns of their branded products and their relevance to the changing fashion markets. The Group's strong partnership with these active and exciting brands has been delivering solid growth. Additionally, we have also taken on board numerous worldwide brand leaders which fit well into our growth-partnership model. Although the recent world economic situation presents many difficulties, it is estimated that there will be continued pairage growth for the year.”

The Group’s focus on quality premium casual footwear products has been proven a growth driver. In the year under review, the Group achieved a higher share of the higher-margin premium casual category in turnover contribution. The casual footwear category represented 54.46% (2007: 49.27%) of the total turnover; whereas the baby and children shoes and rugged footwear categories accounted for 40.72% (2007: 33.89%) and 4.82% (2007: 16.84%) respectively of Group turnover.

The Group’s core production capability comprises a network of factories with a total of 38 production lines, of which 13 are located in Vietnam and Cambodia, and 25 in the Mainland. The Group's multi-location manufacturing facilities have provided strong support for maintaining its niche in producing premium infant, children, ath-leisure, casual and rugged footwear.

With production bases in the Mainland, Vietnam and Cambodia, the Group now enjoys a much greater flexibility that is essential for the management to plan strategically and mitigate potential political and market risks, including taxes and quota restrictions. This multi-location manufacturing strength also enables the Group to tweak more sharply its market penetration initiatives into the US and Europe. The facilities in Vietnam and Cambodia are particularly instrumental in tapping the European market.

The output and contribution from the factory in Vietnam recorded 12.12% and 16.14% growth in terms of output and value respectively. This is mainly attributable to increased orders from European customers to suppliers in Asia. The factory in Cambodia has commenced production successfully to help serve existing and new customers in Europe. It is expected that a total of three production lines in Cambodia will become operational by the end of 2008. The Group will also continue to upgrade the existing facilities in Zhongshan, Zhuhai and Taiwan.

Orders from customers in the US, Europe and other markets represented 49.59% (2007: 53.78%), 44.78% (2007: 41.00%) and 5.63% (2007: 5.22%) respectively of the Group’s turnover. This good balance of market spread between the US and Europe allows the Group to capture market growth opportunities and at the same time is another risk aversion perk for any unforeseeable market adversity.

During the reporting period, the Group’s major customers included Skechers, Clarks, Stride Rite and Elefanten and has also announced the addition of new customers such as Ariate and Camper.

Another step towards diversification is going into the retail sector in the Mainland and Hong Kong. As an initial step, the Group has acquired Hong Kong retail chain shops “Mocca” and further acquisition projects are also under consideration. The Group will proceed with caution in this new business area.

Mr Chen added: “We remain positive over the demand for our products, in particular premium casual footwear. Our 2007/08 achievement is admirable and we look forward to attaining better results for 2008/09 and beyond.”

As at March 31, 2008, the Group maintained its conservative and healthy financial position with cash and bank deposits of approximately HK$281 million (2007: HK$216 million). The current ratio was approximately 1.82 (2007: approximately 1.9) and the quick ratio was approximately 1.43 (2007: approximately 1.33).

About Kingmaker Footwear Holdings
Kingmaker Footwear Holdings Limited (HKEx: 1170) is a premium name-brand manufacturer of fashion casual, baby and rugged footwear. The Group operates 38 production lines in China, Vietnam and Cambodia with a staff of 15,000. Its branded customers include Skechers, Clarks, Stride Rite, Elefanten, 310, Marc Ecko, Zoo York, Avirex, Ariate and Camper, etc.