Li & Fung registers double-digit profit growth for Q2

14 Aug '09

3 min read

Hong Kong-based global consumer goods exporter Li & Fung Limited announced double-digit profit growth for the first half of 2009 despite a challenging market.

For the first six months ended 30 June 2009, the Group's core operating profit increased by 11% to HK$1,697 million, reflecting its successful efforts in controlling costs. Profit attributable to shareholders reached HK$1,397 million, an increase of 13% compared to same period in 2008. The Group's turnover was HK$46,292 million (US$5,935 million), 2% lower than the same period last year, which reflects the weakness in consumer markets and some customer insolvencies announced earlier. Basic earnings per share were 38.3 HK cents, an increase of 6% compared to 36.0 HK cents for the same period in 2008.

The Board of Directors has proposed an interim dividend of 26 HK cents per share (2008 interim: 24 HK cents).

Mr. William K Fung, Group Managing Director of Li & Fung Limited, said, “We are very pleased that the Group's focus on delivering operating leverage has started to bear fruit. While overall consumer sentiment is still weak, we have been able to grow our bottom line at a healthy rate, and this reflects that the Group's cost control initiatives have been very successful, particularly in the areas of selling expenses and travelling costs.

“Driving operating leverage has been one of the key objectives of the current Three-Year Plan, and the Group is committed to continuing this effort for the remainder of the current Three-Year planning period.”

Outsourcing Deal
Li & Fung also announced that it has entered into a buying agency agreement with Talbots, Inc. whereby Li & Fung will act as the exclusive global apparel sourcing agent for the Talbots brand. As part of the agreement, Li & Fung will serve as the exclusive agent for substantially all Talbots apparel products. Li & Fung will also be non-exclusive agent for swimwear, intimate apparel, footwear, jewelry, handbags, and accessories. Talbots is a leading specialty retailer and direct marketer of women's apparel, shoes and accessories. The deal is expected to be completed by September this year.

Mr. Bruce Rockowitz, President of Li & Fung (Trading) Limited, said, “We are delighted to see the execution of this strategic outsourcing deal with Talbots today. Under Talbots new leadership, we see great potential of their business going forward. With our strong network of over 80 offices in over 40 economies, we are confident that our dedicated merchandising team will be able to further strengthen the positioning of the Talbots brand as we deliver the highest quality products.

“Meanwhile, we are also continuing with our acquisition strategy. With the share placement proceeds that we obtained in May of this year, we are in a very good position to take advantage of the many opportunities that may arise in this economic environment.”

Li & Fung Limited

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