As a result of successful cost control measures and efficiency enhancement initiatives, net profit attributable to equity holders of the Company also increased by approximately 16.5% year on year to approximately HK$122 million (2010: approximately HK$105 million). Basic earnings per share were up 13.1% to HK18.59 cents (2010: HK16.43 cents). The Group declared a final dividend of HK7.0 cents (2010: HK7.0 cents) which, together with the interim dividend of HK3.0 cents (2010: 1.6 cents), represents a payout ratio of 53.8% (2010: 52.3%).

Kingmaker Footwear Chairman and Managing Director Mr Chen Ming-hsiung, Mickey said: “I am pleased to report that Kingmaker is entering the fiscal 2011/12 in an even more competitive position relative to the current market. We are cautiously optimistic that the Group will deliver growth in the coming year. This will be achieved through pursuing our strategy of further gains in market share, capacity expansion and operational excellence.”

Growth continued to be witnessed in the sales of “wellness” shoes, which helped raise the proportion of premium casual footwear to an aggregate of approximately 60.3% (2010: approximately 54.2%) of Group turnover. Babies’ and children’s footwear and rugged shoes accounted for approximately 35.3% (2010: approximately 45.1%) and approximately 4.4% (2010: approximately 0.8%) respectively of total production.

In respect of market breakdown, shipments to the US contributed approximately 59.6% (2010: approximately 51.1%) of the Group’s revenue, while the European segment accounted for approximately 31.4% (2010: approximately 41.5%) of the total. The distribution was both market-driven and a result of the Group’s dedicated efforts to develop casual premium and other sophisticated footwear products that command higher ASP and profit margin.

The Group is pleased to report an enhancement in ASP which attests to its efforts to develop a premium product portfolio. Working as a long-term partner, the Group was able to gain the support of its customers in reflecting part of its cost increases in the ASP.

During the year, the Group’s facilities were reorganized into three specialized production hubs serving different manufacturing requirements and levels of sophistication. First, the Zhuhai and Zhongshan factories will serve as the Group’s headquarters, R&D center and high-end manufacturing base. The inland Jiangxi factory will be for the production of mid-range footwear, and finally the facilities in Southeast Asia are for European shipments and mass market products.

The Group has a total of 38 production lines, 11 lines of which are located in Vietnam, five in Cambodia, and 24 in the PRC, including 11 in Zhongshan, eight in Zhuhai and three lines in Jiangxi Province. Overall facilities utilization was 71% (2010: 65%) during the year.

Plans are under way to expand the production lines to 44 by the end of 2011, bringing total annual capacity up by approximately 25% to about 25 million pairs. Works are ongoing to restart the expansion plans for the Jiangxi and Cambodia plants, adding three production lines to each of these facilities within this year.

Major customers during the year included Skechers, Clarks, Stride Rite, Rockport and New Balance which in aggregate contributed approximately 92.7% of the Group’s total turnover. New Balance and Timberland were added to the customer portfolio during the year.

The retailing segment has taken steps to re-engineer the overall unit. Focus will be placed on the development of the house baby brand Fiona’s Prince, which currently operates five shops in Hong Kong and Macau, and 11 in the PRC. After its successful introduction to the PRC market in 2010, including securing its first foothold in the first-tier cities of Beijing and Shanghai, Fiona’s Prince has since achieved encouraging performance and customer recognition. Active business development is planned for this baby line with negotiations ongoing for the establishment of some 30 retail points in other PRC cities in 2011.

Cash and cash equivalents were maintained at a favorable level of approximately HK$530 million (2010: approximately HK$527 million) as at 31 March 2011. The current ratio was 2.33 (2010: 2.08) and the quick ratio was 1.87 (2010: 1.75).

About Kingmaker Footwear Holdings
Kingmaker Footwear Holdings Limited (HKEx: 01170) is a premium name-brand manufacturer of fashion casual and children’s footwear. The Group operates 38 production lines in China, Vietnam and Cambodia with a staff of 14,000. It also has a retail segment which operates chains to carry footwear, apparel and accessories under the Fiona’s Prince and MOCCA brands.