Chairman's Statement |
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Chairman's Statement Our results for fiscal 2011 did not hold any big surprises. In our Interim Report and 3rd quarter update we noted the ongoing developments in the global environment which were affecting all aspects of economic activity. Sales were flat at HK$1.34 billion and gross profit margin reduced to HK$259 million, down 12% year on year. After tax earnings were HK$56.7 million, and basic earnings per share were HK5.1 cents. The results well reflect the weakening global market and the continued deterioration in the operating environment in China, which is losing its position as the low cost producer of consumer products. We adhered to our stated strategy to migrate production to our most effective locations and to improve overall cost efficiency in order to counter the escalating and irreversible cost trends in China. During the year, we have weeded out some of the high cost production lines, including the plant in the Philippines, and we have scaled down our production in China with replacement capacity planned by an ongoing expansion of our existing facility in regional Thailand. In addition, your Board has decided to invest in a new factory operation in Cambodia. It is anticipated that the new plant, in Phnom Penh, will be operative before the end of this calendar year. The move serves to replace some of the high cost capacity in China, and to diversify the Group’s manufacturing activities outside of China and Thailand. The general outlook for the next twelve months is challenging. At this time of writing, not only there is no light in Your Board, having taken into account the current business climate, our cash position and reinvestment needs, has decided to propose a final dividend of HK$0.025 per share for the fiscal year ended 30 June 2011 (2010: HK$0.025 per share). Together with the interim dividend of HK$0.015 per share, this represents an aggregate distribution of HK$0.04 per share (2010: HK$0.04 per share). On 2 March 2011, the Board announced the appointment, subject to the approval of shareholders at the upcoming Annual General Meeting of their re-appointment, of two new Executive Directors, Mr. Wong Kai Chi, Kenneth and Mr. Wong Kai Chung, Kevin. Biographical details are set out on page 34 of this Annual Report. Both have held a number of senior management positions within the Group. I am happy to note that the addition of these two new Executive Directors will no doubt enhance the service of the Board to shareholders, and help to rejuvenate our otherwise aging Board structure. In closing, I would like to, on behalf of the Board, express our appreciation to all our employees for their hard work and diligence in what has been a challenging year.
Fung Wai Yiu
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