Group turnover totaled RMB 2,902.9 million (2011: RMB 4,646.9 million), a decline of 37.5% when compared to that in 2011. The decline in turnover was mainly attributable to destocking in the sportswear industry and a decrease in the demand for sports products caused by weak economy throughout the year.
Gross profit margin decreased to 36.5%, representing a decline of 2.9% points year-on-year, mainly due to rising production costs and increases in subsidies and rebates provided as a support to distributors.
The inventory level has substantially improved with a decrease of 26.9% to RMB386.4 million as at 31 December 2012 from RMB528.9 million as at 30 June 2012. Profit attributable to shareholders was RMB310.6 million, a decrease of 60.1% year-on-year. Both of the basic and diluted earnings per share were RMB14.80 cents.
The Board of Directors recommended a final dividend of HK3 cents per share and a special dividend of HK2 cents per share. Together with the interim dividend of HK5 cents per share, the Company’s dividend payout ratio was 55.0%.
In 2012, the Group focused on adjusting and optimizing its distribution network. The number of authorized retail outlets decreased to 6,483 as at 31 December 2012 from 7,806 as at 31 December 2011. This represented a net decrease of 1,323 outlets during the year. The average floor area per retail outlets increased from 79.1 square meters at the end of 2011 to 86.7 square meters at the end of 2012.
The increase in average floor area is consistent with the Group’s strategy of increasing gradually the size of show rooms so that more of the Group’s products can be displayed, which should also help improve the Group’s brand image. The Group increased the number of distributors from 50 at the end of 2011 to 59 at the end of 2012. The rise was mainly the result of strengthened marketing management.
In 2013, the Group will continue to optimize its distribution network in order to prepare for the continued growth of the sportswear industry. The Group intends to further restructure its retail network by closing small and less-efficient retail outlets and opening larger ones through its distributors and retail outlet operators.
In addition, the Group will encourage each of its retail outlet operators to open more retail outlets in order to help them to withstand market risk. In terms of distributors, the Group intends to increase the number of distributors and encourage distributors to set up more self-owned retail outlets in order to help enhance competitiveness, collect market information and improve their ability to cope with market changes.
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