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Concrete fundamentals drive turnover of Kingmaker Footwear

14
Jul '09
Leading premium casual and children's footwear manufacturer Kingmaker Footwear Holdings Limited announces that during the year to March 31, 2009, the Group succeeded in achieving 11.08% year-on-year turnover growth to HK$1,464 million (2008: 1,318 million) on the back of a 2.91% improvement in the average selling price (“ASP”) and 7.05% increase in output volume. Net profit attributable to shareholders also increased 5.55% to HK$53 million (2008: HK$50 million). Earnings per share were HK8.20 cents (2008: HK7.69 cents). The Group declared a final dividend of HK2.5 cents (2008: HK2.0 cents) which, together with the interim dividend of HK1.5 cents (2008: HK1.5 cents), represents a payout ratio of 48.31% (2008: 45.33%).

Kingmaker Footwear Chairman and Managing Director Mr Chen Ming-hsiung, Mickey said: “Under the unstable environment, revenue growth continued to be underpinned by our market-driven product mix. Our resilience bears witness to a set of concrete fundamentals and continuous efficiency improvements backed by an innovative research-and-development capability and diversified multi-location production base. Momentum has been maintained not only through capacity expansion, but also through the constant pursuit of business diversification, the latest move being downstream towards the retailing sector.”

The Group continued to adjust its product mix and during the year, babies' and children's footwear became the major category accounting for 48.60% (2008: 40.72%) of turnover, whereas premium casual footwear and rugged products contributed 48.09% (2008: 54.46%) and 2.38% (2008: 4.82%), respectively.

The Group manages a strategic production platform with facilities in the PRC, Vietnam and Cambodia to cater for the US and European markets.

In the PRC, the Group operates a total of 26 production lines in Zhuhai, Zhongshan and Jiangxi, turning out a total of 14 million pairs of shoes annually. To serve the US market, the Group will continue to maintain and strengthen its production base in the PRC. And to maintain its comparative advantage, it has moved forward with its plan to establish facilities further inland, with the new facilities in Jiangxi Province commencing operations in the first half of 2009. Annual capacity is expected to increase by 7.89% by 2010.

The expansion of production facilities in Vietnam and Cambodia also made excellent progress, with the new facilities being designed to increase annual capacity by 16.67% by 2010. During the reporting year, total output was 5 million pairs, mainly for shipment to Europe.

Turnover contributed by the US market increased slightly to 50.37% (2008: 49.59%) despite the continuing appreciation of the RMB, whereas shipments to European countries dropped to 41.90% (2008: 44.78%) of total turnover, due to the increase in the babies' and children's category with lower ASP.

The Group is delighted to report that its efforts in starting new relationships with new brands were brought to fruition, bringing in new orders from Camper, K1X and Rockport. Major customers during the year included Skechers, Clarks, Stride Rite, Elefanten and G-Star, which in aggregate contributed to 94.65% of turnover.


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