There was a 3.80% improvement in the average selling price (ASP), reflecting the success of the Group's ongoing efforts to move further away from price-sensitive mass-market products and into the niche premium fashion category. Net profit attributable to equity holders of the Company was down by 18.13% to HK$29 million (2007: approximately HK$35 million) due to increased salaries and selling expenses. Earnings per share were HK4.45 cents (2007: HK5.40 cents). The Group declared an interim dividend of HK1.5 cents (2007: HK1.5 cents) per share.

Mr Mickey Chen Ming-hsiung, Chairman and Managing Director, Kingmaker Footwear Holdings said: "Overall, we remain optimistic about our long-term prospects. The current order book, although sluggish in the early part of 2009, still points to solid demand for the Group's products, in particular in the core premium casual and children's categories. We also aim to step up the expansion of production capacity to achieve greater economies of scale, as well as the capability to enhance product offerings. In addition to pursuing organic expansion, we are riding on our strong financial fundamentals to actively seek a faster pace of growth through mergers and acquisitions as more opportunities emerge during the market downturn."

In the first half of the fiscal year, orders from US, EU and other countries contributed 54.74% (2007: 52.43%), 36.07% (2007: 42.17%) and 9.19% (2007: 5.40%) respectively of Group turnover. It is notable that shipments to the US market recorded a slight increase against market turbulence and an appreciating Renminbi.

During the reporting period, the Group accomplished a higher ASP despite a drop in the proportionate contribution of the higher-margin premium casual category against robust sales in the babies' and children's footwear category. In the first six months of the fiscal year, the premium casual category represented 53.32% (2007: 54.40%) of total turnover; whereas the babies' and children's and rugged categories accounted for 43.69% (2007: 34.93%) and 2.22% (2007: 10.67%) respectively of Group turnover. The shift in the product mix was partly led by demand growth for babies' and children's shoes in the EU market.

The Group's core production capability comprises a network of factories with a total of 39 production lines, of which 14 are located in Vietnam and Cambodia, and 25 in the Mainland China, including 9 in Zhongshan and 16 in Zhuhai. This multi-location production base has continued to support the Group's business and product development initiatives across various market fronts, while enabling the Group to mitigate potential political and market risks. Expansion of facilities in Vietnam and Cambodia has progressed as scheduled, and the new manufacturing plant in Jiangxi Province, Mainland China, is expected to commence operation in the first half of 2009.

During the period, the Group's major customers included Skechers, Clarks, Stride Rite, Camper and G-Star, which in aggregate contributed 93.11% (2007: 98.83%) of total turnover.

Earlier in 2008, the Group took forward a diversification initiative by acquiring the MOCCA fashion footwear chain in Hong Kong for a consideration of HK$3,672,000, followed by an active rollout of shop openings in the territory. The initial set-up costs of the shops resulted in an interim segment loss of HK$3.8 million, but the board is confident that this business unit will grow into a major income stream for the Group.

The Group will continue to maintain conservative cash flow management to sustain a strong cash position. As at September 30, 2008, the Group had no significant borrowings, and maintained cash, bank deposits and structured deposit of HK$292 million (March 31, 2008: HK$293 million).

About Kingmaker Footwear Holdings
Kingmaker Footwear Holdings Limited (HKEx: 01170) is a premium name-brand footwear manufacturer specializing in fashion casual and baby shoes. The Group operates a multi-location production base with 39 production lines in China, Vietnam and Cambodia serviced by a staff strength and workforce of 14,000. Its name-brand customers include Skechers, Clarks, Stride Rite, Camper and G-Star.