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LUNG KEE (BERMUDA) HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)

Website: http://www.irasia.com/listco/hk/lkm

FINAL RESULTS FOR THE YEAR ENDED 31ST MARCH, 2000

FINANCIAL HIGHLIGHTS
  growth
  • Turnover --- HK$889,542,000
  • 29.65%
  • Profit attributable to shareholders --- HK$110,005,000
  • 65.75%
  • Earnings per share --- 28.84 cents
  • 64.89%

    RESULTS

    The Directors of Lung Kee (Bermuda) Holdings Limited (the "Company") have pleasure in submitting the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31st March, 2000 together with comparative figures for the year ended 31st March, 1999 as follows:

                                                       2000               1999
    
                                      NOTES         HK$'000            HK$'000 
    
    Turnover                                        889,542            686,127
    
    Other revenue                                     6,032              5,243
    
    Changes in inventories of 
      finished goods and work 
      in progress                                    10,842            (28,886)
    
    Raw materials and consumables 
      used                                         (429,281)          (278,211)
    
    Staff costs                                    (125,483)          (106,694)
    
    Depreciation and amortisation                   (69,718)           (64,384)
    
    Other operating expenses                       (109,320)          (114,598)
                                                -----------        -----------
    
    Profit from operations                          172,614             98,597
    
    Finance costs                                    (6,793)           (10,060)
    
    Interest income                                   5,628              6,191
    
    Loss on deemed disposal of a 
      subsidiary                                     (2,381)               ---
    
    Share of result of a jointly 
      controlled entity                                 168                 22
    
    Share of result of an associate                     ---               (288)
                                                -----------        -----------
    
    Profit before tax                               169,236             94,462
    
    Taxation                             1          (27,122)           (11,450)
                                                -----------        -----------
    
    Profit after tax                                142,114             83,012
    
    Minority interests                              (32,109)           (16,643)
                                                -----------        -----------
    
    Profit attributable to shareholders             110,005             66,369
                                                ===========        =========== 
    
    Dividends                            2           61,534             37,956
                                                ===========        =========== 
    
    Earnings per share
    
    --- Basis                            3      28.84 cents        17.49 cents
                                                ===========        =========== 
    --- Diluted                          3      28.39 cents        17.40 cents
                                                ===========        =========== 
    

    NOTES:

    (1) Taxation
    
                                                      2000               1999
                                                   HK$'000            HK$'000 
    
    
    The charge comprises: 
    
    Hong Kong Profits Tax                           19,708             11,316
    
    Taxation in jurisdictions outside 
      Hong Kong                                     12,127              2,000
                                               -----------        -----------  
                                                    31,835             13,316
    
    Deferred taxation                               (4,713)            (1,866)
                                               -----------        -----------  
                                                    27,122             11,450
                                               ===========        ===========     
    

    Hong Kong Profits Tax is calculated at 16% (1999: 16%) of the estimated assessable profit for the year.

    Taxation in jurisdictions outside Hong Kong is calculated based on the applicable rates.

    There was no significant unprovided deferred taxation for the year or at the balance sheet date.

    (2) Dividends
    
                                                      2000               1999
                                                   HK$'000            HK$'000 
    
    
    
    Interim dividend of 6 cents (1999: 3 cents) 
      per share paid to the Company's 
      shareholders                                  23,065             11,387
    
    Proposed final dividend of 10 cents 
      (1999: 7 cents) per share payable to the 
      Company's shareholders                        38,469             26,569
                                               -----------        -----------    
                                                    61,534             37,956
                                               ===========        ===========
    
    (3) Earnings per share

    The calculation of basic earnings per share is based on the profit for the year of HK$110,004,670 (1999: HK$66,368,855) and on the weighted average of 381,429,225 shares (1999: 379,559,375 shares) in issue during the year.

    The calculation of diluted earnings per share is based on the adjusted profit for the year of HK$108,999,670 (1999: HK$66,053,855) and on the weighted average of 383,951,493 Shares (1999: 379,571,652 share) in issue for the purposes of diluted earnings per share during the year.

    FINAL DIVIDEND

    The Directors have resolved to recommend to shareholders at the forthcoming 2000 Annual General Meeting the payment of a final dividend of 10 cents per share for the year ended 31st March, 2000 to shareholders whose names appear on the Register of Members on 1st September, 2000. Subject to the approval by shareholders at the forthcoming 2000 Annual General Meeting, the proposed final dividend will be despatched to shareholders on or about 7th September, 2000.

    BONUS ISSUE OF SHARES

    The Directors also recommend a bonus issue of shares ("Bonus Issue") credited as fully paid to shareholders whose names appear on the Register of Members of the Company on Friday, 1st September, 2000 on the basis of one new share for every four existing shares then held. The bonus shares will not rank for the proposed final dividend for the year ended 31st March, 2000 but will rank pari passu in all other respects with the existing issued shares.

    No fractional shares shall be alloted and distributed as aforesaid, but shares representing fractional entitlements shall be aggregated and sold for the benefit of the Company.

    The Bonus Issue is conditional upon (i) approval of the shareholders at the forthcoming Annual General Meeting of the Company and (ii) the Listing Committee of The Stock Exchange of Hong Kong Limited grating listing of and permission to deal in the bonus shares. A circular giving, inter alia, details of the Bonus Issue will be sent to shareholders of the Company in due course. The proposed share certificates of bonus shares will be despatched to shareholders on or about 7th September, 2000.

    BUSINESS REVIEW

    The economy obviously turned better this year but still had not recovered to the status before the Asian financial turmoil. The prices, in particular, were still at a lower level than before.

    In line with the gradual improvement in the overall economy, the Group's sales business of moulds continued to achieve growth and the plants in China continued to manufacture high quality products for the Group.

    During the year, the operation of the plant in Heyuan, China had got onto the right track. Both quality and production capacity had achieved the targets. Production was smooth with the cost of production gradually decreasing. The plant mainly produces standard mould bases at present. With a continuously expanding market share, the plant had made significant contribution to the Group.

    The plant in Dongguan, China mainly produces highly quality tailor-made mould bases to meet the customers' increasingly demanding requirements for quality and quick delivery.

    The plant in Guangzhou, China continued to export high quality mould bases this year and achieved satisfactory sales results. Both productivity and number of customers were continuously on the increase. Moreover, the demand for mould bases in eastern China continued to increase in the past year, resulting in the continued growth in sales in Shanghai, China.

    Since the mould bases manufactured by the Group were well received by the Japanese market and the turnover had increased substantially, the leased warehouses were inadequate to meet the demand. As a result, the Group had acquired warehouses in Japan to serve as the sales base for acceptance of orders.

    In Singapore and Malaysia, the sales continued to achieve growth in line with the economic recovery in both countries last year.

    By virtue of the continuous growth maintained in the sales of mould steel and the continuously expanding product range, the market share also increased significantly.

    PROSPECTS

    The extension of the plant in Heyuan, China will be completed by the end of this year and production of medium-sized, tailor-made mould bases will commence early next year.

    The plant in Guangzhou, China will also develop, mainly for export, spare parts of high quality mould bases. It can strengthen the horizontal development of the Group in the mould industry, bring more comprehensive product range, higher competitiveness and new contribution for the Group.

    Demand for mould has been gradually increasing in eastern China, either from local manufacturers or manufacturers from other provinces. The Group's plant in Shanghai, China is just in time to meet this trend. We shall install more machines and equipment and improve our productivity to satisfy the need of the market.

    With the enter of China to the WTO, our customers' demand for moulds of high quality is increasing, especially the significant increase of demand for mould in automobile industry. Thus, our plant in Dongguan will actively enhance its capability in computer-aided drawing and design and improve its capacity in the production of high standard, large-sized and tailor-made mould bases to satisfy the need of our customers for such products.

    As competition among domestic enterprises (including individual producers) has been keener and keener, demand for moulds of high quality is increasing. The Group's selling point in Dongguan, China will aggressively build up business relationship with domestic enterprises and individual producers in southern China to expand the Group's customer base.

    The Group's mould steel product division will install vacuum furnace and nitrating heat treatment equipment in order to provide more value-added service to our customers. In addition, the Group also purchased several quality assurance equipment for steel products, and physico-chemical analysis equipment to strictly inspect incoming material for the maintenance of the quality of our mould steel products. On the other hand, the Group has also done our best to introduce more quality steel products and technology material to satisfy different need of various customers.

    With regard to the internet, a trend in the new economy, the Group will also make use of this new and high technology to develop on-line trading which will allow customers around the world to place orders on our products more conveniently and directly and facilitate us to expand our market in various parts of the world.

    Notwithstanding of the keen competition, the market share of the Group still continued to increase and outpaced our competitors. Our success depends on our staff's concerted efforts to maintain "Lung Kee" in the leading position in mould industry.

    THE YEAR 2000 COMPLIANCE

    The Year 2000 problem arises from the practice of using 2-digit year in computer systems. When 21st century comes, all computer systems working in this manner will misinterpret the year.

    The modification and replacement of the computer hardware and software for Year 2000 compliance have been completed on schedule in Year 1999. No material adverse impact in relation to the Year 2000 on the business has been occurred.

    The total costs for the modification and replacement is approximately HK$500,000. These expenses have been charged to the respective year's profit and loss accounts. At the moment, the Group does not expect any further expenses in relation to this issue.

    CLOSURE OF REGISTER OF MEMBERS

    The Register of Members of the Company will be closed from 28th August, 2000 to 1st September, 2000, both days inclusive during which period no share transfers will be effected.

    In order to qualify for the proposed final dividend and bonus shares, all share certificates accompanied by the completed transfer forms either overleaf or separate or Standard Transfer Form must be lodged with the Hong Kong Branch Registrars of the Company, Central Registration Hong Kong Limited of 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong for registration not later than 4:00 p.m. on 25th August, 2000.

    PURCHASE, SALE OR REDEMPTION OF SECURITIES

    There was no purchase, sale or redemption of shares or other securities of the Company by the Company or any of its subsidiaries during the year.



    By Order of the Board
    Siu Tit Lung
    Chairman

    Hong Kong, 30th June, 2000


    Source: Lung Kee (Bermuda) Holdings Limited
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