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Unaudited FSHL fiscal report shows recovery

19 May '06

3 min read

Knitted fabric company Fountain Set (Holdings) Limited (Fountain Set) announced its unaudited consolidated interim results for the six months ended February 28, 2006. The results of the Group for the six months ended February 28, 2006 have substantially improved over the same period last year.

Profit margin for the period under review was 6.32 percent, a drastical increase of 4.57 percentage point over the same period last year. Earnings per share were HK25.78 cents, compared to HK6.88 cents in 2005. The Board resolved the payment of an interim dividend of HK4.50 cents per share.

The increase in profit for the first half of 2006 was a sign of continuous recovery of the Group as well as the resolution of the expensive inventory issue which troubled the Group in the same period last year.

During this period, the increased demand for lower-priced items and the intensifying competition in the international textile industry reduced the average selling price of our products.

On the other hand, with our innovative and broad research and development efforts, well positioned manufacturing facilities and proactive marketing activities, the Group continued to grow by penetrating into new markets and gaining new customers.

In addition, the upsurge in the international fuel and energy prices throughout the period under review increased the cost of certain raw materials and electricity generation.

Higher inflation in the PRC, including the increase in minimum wage, combined with the appreciation of Renminbi against the US dollar by 2.1 percent since July 2005 and the increases in interest rates have created pressure on the profit margin of the Group.

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