ANNUAL RESULTS ANNOUNCEMENT
FOR THE YEAR ENDED 31ST DECEMBER, 1999
| Financial Highlights |
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| Financial Summary |
Turnover Trend Net Profit Trend  Breakdown of Turnover by Geographical Areas in 1999  |
FINANCIAL RESULTS
The Board of Directors of Lerado Group (Holding) Company Limited (the "Company") is pleased to present the audited consolidated results of the Company and its subsidiaries (collectively the "Group") for the year ended 31st December, 1999, together with the comparative figures for the year ended 31st December, 1998 as follows:
1999 1998
Notes HK$'000 HK$'000
Turnover 1,066,666 959,710
Cost of sales (763,739) (695,740)
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Gross profit 302,927 263,970
Other revenue 16,570 14,035
Distribution costs (107,070) (91,433)
Administrative expenses (89,993) (81,438)
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Profit from operations 122,434 105,134
Finance costs (1,556) (4,649)
Investment income 11,656 4,193
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Profit from ordinary activities
before taxation 132,534 104,678
Income tax expense 2 7,389 3,790
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Profit before minority interest 125,145 100,888
Minority interest (1) --
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Profit attributable to shareholders 3 125,146 100,888
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Dividends 4 65,391 37,456
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EARNINGS PER SHARE 5
Basic 17.33 cents 18.71 cents
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Diluted 17.26 cents N/A
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Notes:
1. Basis of Presentation
The Company is an exempted company with limited liability in Bermuda under The Companies Act 1981 of Bermuda (as amended) and its shares have been listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
The companies in the Group underwent a group reorganisation in preparation for the listing of the Company's shares on the Stock Exchange in December 1998. Details of the group reorganisation are set out in the prospectus of the Company dated 8th December, 1998. The comparative financial statements of the Group for the year ended 31st December, 1998 were prepared on the basis as if the Company had always been the ultimate holding company of the Group. In the opinion of the directors of the Company, the financial statements, prepared on this basis, present fairly the state of affairs and the results of the Group as a whole.
2. Income Tax Expense
1999 1998
HK$'000 HK$'000
The charge comprises:
Hong Kong Profits Tax
Current year 300 620
Overprovision in prior years (note) (198) (3,300)
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102 (2,680)
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Overseas taxation
Other regions in the People's Republic
of China (the "PRC") 6,345 5,417
Other jurisdications 942 1,013
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7,287 6,430
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Deferred taxation
Current year -- 45
Attributable to a change in tax rate -- (5)
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-- 40
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7,389 3,790
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Note: The overprovision of Hong Kong Profits Tax for the year ended 31st December, 1998 represented a reverse of tax provision made in previous years in respect of an offshore claim which was finalised in that year.
Hong Kong Profits Tax is calculated at 16% of the estimated assessable profit for the year.
Overseas taxation is calculated at the rates prevailing in the relevant jurisdictions.
3. Profit attributable to shareholders
Of the Group's profit attributable to shareholders of approximately HK$125,146,000 (1998: HK$100,888,000), a profit of approximately HK$65,310,000 (1998: HK$1,143,000) has been dealt with in the financial statements of the Company.
4. Dividends
1999 1998
HK$'000 HK$'000
Interim dividend of HK3 cents per ordinary share 21,786 --
Proposed final dividend in cash form equivalent
to HK6 cents per share, with a scrip option 43,605 --
Dividends paid by a subsidiary of the Company to its
then shareholders prior to the Group reorganisation
referred to in note 1 -- 37,456
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65,391 37,456
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5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
1999 1998
Profit attributable to shareholders
and earnings for the purposes of the basic
and diluted earnings per share HK$125,146,000 HK$100,888,000
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Weighted average number of ordinary shares for
the purposes of basic earnings per share 721,959,671 539,337,120
Effect of dilutive potential ordinary shares
in respect of share options 3,286,784 N/A
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Weighted average number of ordinary shares for
the purposes of diluted earnings per share 725,246,455 N/A
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6. Transfer to/from reserves
During the year, HK$4,653,000 was transferred from the profit and loss account to the statutory surplus reserve fund.
DIVIDEND
The Board of Directors will recommend to pay a final dividend of HK6 cents per share. Together with an interim dividend of HK3 cents per share, the total dividend of the year under review will amount to HK9 cents. The final dividend will be satisfied by way of cash with an option to elect scrip dividend of shares, payable to the shareholders whose names appear in the register of members of the Company on 29th May, 2000. Dividend warrants are expected to be sent out before 30th June, 2000. Further details will be announced in due course.
BUSINESS REVIEW
Sales and Marketing
Major Achievements
Join forces with Step2
Commenced production of battery operated ride-on cars
Market Opportunities
FUTURE PLANS
YEAR 2000 ISSUE
The Group's compliance program regarding Year 2000 compliance efforts has been disclosed previously in the 1999 Annual Report. The program was completed on schedule with all the critical system of the Group being Year 2000 compliant. The Group has successfully passed through the millennium rollover, with smooth transition on the major critical dates of 31st December, 1999 and 29th February, 2000. The Group does not expect any significant problem which may arise from the Year 2000 Issue.
The Group has, within our budget for the Year 2000 Issue, incurred approximately HK$1,900,000. This comprised mainly acquisitions of new computer hardware and software, which are treated as capital expenditure and are amortised over their expected useful lives. The Group has no further material commitment relating to this issue.
CLOSURE OF REGISTER OF MEMBERS
The Register of Members of the Company will be closed from 25th to 29th May, 2000, both days inclusive, during which period no transfer of shares will be registered. In order to qualify for the final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company's Registrar, Secretaries Limited, 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong, not later than 4:00 p.m. on 24th May, 2000.
PURCHASE, SALE OR REDEMPTION OF SHARES
Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's shares during the year.
GRATITUDE
On behalf of the Board of Directors, I wish to extend our gratitude to all customers and business associates for putting their trust in our capabilities. May I also take this opportunity to express my heartiest thanks to all our employees for their hard work and loyalty.
By Order of the Board
Huang Ying Yuan
Chairman
Hong Kong, 18th April, 2000
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