INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30TH SEPTEMBER, 2000
The Board of Directors (the "Directors") of Yau Lee Holdings Limited (the "Company") is pleased to announce that the unaudited results of the Company and its subsidiaries (the "Group") for the six months ended 30th September, 2000:-
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
FOR THE SIX MONTHS ENDED 30TH SEPTEMBER, 2000
Unaudited
Six months ended
30th September,
2000 1999
Notes HK$'000 HK$'000
Turnover 2 927,154 860,840
Cost of sales (844,770) (800,878)
---------- ----------
Gross profit 82,384 59,962
General and
administrative expenses (52,142) (48,994)
Loss on disposal of
investment properties - (733)
Gain on disposal of
associated companies - 4,079
Other revenue, net 5,197 4,514
---------- ----------
Profit from operations 35,439 18,828
Finance costs (4,088) (5,751)
---------- ----------
Profit before share of
profit of associated
companies and taxation 31,351 13,077
Share of profit of
associated companies 388 1,272
---------- ----------
Profit before taxation 3 31,739 14,349
Taxation 4
Company and subsidiaries (5,439) (1,800)
Associated company (517) (448)
---------- ----------
Profit after taxation 25,783 12,101
Minority interest (162) (636)
---------- ----------
Profit attributable
to shareholders 25,621 11,465
Dividends (7,084) -
---------- ----------
Profit retained
for the period 18,537 11,465
========== ==========
Earnings per share 5 5.79 cents 3.88 cents
========== ==========
CONSOLIDATED BALANCE SHEET
AS AT 30TH SPETEMBER, 2000 AND 31ST MARCH, 2000
Unaudited Audited
30th September, 31st March,
2000 2000
HK$'000 HK$'000
Non-current assets
Property, plant and
equipment 186,609 182,203
Development costs 2,038 1,531
Long-term trade debtors 39,325 26,557
Loans to employees 6,362 4,606
Interest in associates 61,290 52,101
Long-term investments 3,195 2,431
---------- ----------
298,819 269,429
---------- ----------
Current assets
Inventories 16,348 15,668
Gross amount due from
customers for
contract work 206,935 239,297
Trade Debtors 6 312,206 321,404
Prepaid tax 2,934 3,188
Prepayments, deposits
and other receivables 34,001 31,557
Time Deposits, cash and
bank balances 270,423 237,110
---------- ----------
Total current assets 842,847 848,224
---------- ----------
Current liabilities
Trade Creditors 7 135,614 123,895
Dividend payable 7,084 12,397
Provision for taxation 8,607 3,173
Gross amount due to
customers for contract work 175,778 167,464
Current portion of hire
purchase obligations 5,602 8,214
Accruals and other liabilities 127,589 88,492
Bank loans 53,500 103,500
---------- ----------
Total current liabilities 513,774 507,135
---------- ----------
Net current assets 329,073 341,089
---------- ----------
Total assets less
current liabilities 627,892 610,518
---------- ----------
Non-current liabilities
Due to minority
shareholders, net 4,285 4,140
Obligations under hire
purchase contracts
- Repayable after one year 454 1,761
Deferred taxation 12,344 12,344
---------- ----------
17,083 18,245
---------- ----------
Net assets 610,809 592,273
---------- ----------
Capital and reserves
Share capital 88,549 88,549
Share premium 415,430 415,430
Capital reserve 369 369
Retained profit 106,461 87,925
---------- ----------
Shareholders' equity 610,809 592,273
========== ==========
Notes:-
1. Accounting Policies
The unaudited consolidated interim accounts are prepared in accordance with the Hong Kong Statements of Standard Accounting Practice issued by the Hong Kong Society of Accountants and accounting principles generally accepted in Hong Kong.
2. Turnover
The Group's turnover and profits for the six months ended 30th September 2000 were derived principally from the contracting of building construction, maintenance and decoration projects carried out in Hong Kong.
Unaudited Six months ended 30th September
2000 1999
Gross Gross
Turnover profit Turnover profit
HK$'000 HK$'000 HK$'000 HK$'000
Contracting of
building
construction,
maintenance and
decoration projects 904,976 77,575 830,673 52,798
Sale of building
material 21,407 4,610 30,017 7,014
Others 771 199 150 150
-------- -------- -------- --------
927,154 82,384 860,840 59,962
======== ======== ======== ========
3. Profit before taxation
Profit before taxation is arrived at after charging the following:
Unaudited
Six months ended
30th September
2000 1999
HK$'000 HK$'000
Depreciation
Owned assets 10,061 4,834
Assets held under finance lease 1,803 4,446
Loss on disposal of fixed assets 351 29
4. Taxation
Hong Kong profits tax has been provided at the rate of 16% (1999:- 16%) on the estimated assessable profits for the period. Overseas taxation has been calculated on the estimated assessable profits for the period at the rates prevailing in the respective jurisdictions.
5. Earnings per share
Earnings per share has been calculated using the unaudited consolidated profit attributable to shareholders for the period of HK$25,621,000 (1999: HK$11,465,000) and of the 442,746,100 shares as consolidated pursuant to an ordinary resolution passed on 17th October, 2000 (1999: 295,164,067 shares as adjusted). No diluted earnings per share are disclosed as the outstanding share options at 30th September, 2000 and 30th September, 1999 are anti-dilutive.
6. Trade Debtors
Trade debts are due after 21 days to one year depending on the nature of services or products.
The aging analysis of trade debtors at the period end is as follows:
30th September, 31st March,
2000 2000
Not yet due 294,015 290,690
Overdue by:
0-30 days 11,216 22,553
31-90 days 2,825 1,747
91-180 days 2,444 905
over 180 days 1,706 5,509
-------- --------
312,206 321,404
======== ========
7. Trade Creditors
The entire balances of trade creditors at 30th September, 2000 and 31st March, 2000 were not yet due.
CONSOLIDATION OF SHARES
Pursuant to an ordinary resolution passed on 17th October, 2000, every four issued or unissued shares of HK$0.05 each in the then capital of the Company were consolidated into one share of HK$0.20 each (the "Consolidated Share") on 18th October, 2000. As a result the 1,770,984,402 ordinary shares in issue before the share consolidation were consolidated to 442,746,100 Consolidated Shares.
The Consolidated Shares rank pari passu in all respect with each other.
INTERIM DIVIDEND
The Board of Directors recommend the payment of an interim dividend of HK1.6 cents (1999 - nil) per Consolidated Share. The interim dividend will be payable on or about 16th March, 2001 to shareholders whose names appear on the register of members at the close of business on 16th February, 2001.
CLOSURE OF REGISTER OF MEMBERS
The register of members will be closed from Tuesday, 13th February, 2001 to Friday, 16th February, 2001, both dates inclusive, during which no transfer of shares of the Company will be effected. In order to qualify for the interim dividend, all transfer accompanied by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Central Registration Hong Kong Limited at 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later than 4:00p.m. on Monday, 12th February, 2001.
REVIEW OF OPERATION AND RESULTS
The Group recorded a turnover of HK$927,154,000 for the six months ended 30th September, 2000, as compared to HK$ 860,840,000 of the same period last year while the profit before taxation has increased by 121% from HK$14,349,000 in 1999 to HK$31,739,000 this year. The improved result was the combined effect of the Group's relentless effort in cost control and successful diversification to new income sources.
The Group's liquidity position was also significantly improved. Cash in hand as at 30th September, 2000 was HK$270,423,000 compare with HK$237,110,000 at 31st March, 2000. Bank borrowings was further reduced by HK$50,000,000 to HK$53,500,000 at 30th September, 2000 from HK$103,500,000 at 31st March, 2000. Barring any unanticipated events, the management believes the current trend will continue into the second half of the financial year.
During the six months ended 30th September, 2000, the Group has completed three contracts with total value of HK$544 million. The Group also secured a contract with a value of HK$470 million. At 30th September, 2000 the total value of construction contracts in hand amount to HK$3,704 million.
As mentioned in the latest annual report the Group's wholly owned subsidiary company, VHSoft Technologies Co. Ltd. (VHSoft), has launched its software products and e-commerce platforms in July this year. The response has been encouraging and VHSoft is expected to start generating income from the next financial year.
Yau Lee Wah Concrete Precast Products Co. Ltd ("Yau Lee Wah"), which operate the Group's building components factory in Shenzhen, continued to made substantial contribution to the Group's result for the period. Apart from the manufacturing of traditional pre-fabricated building components, Yau Lee Wah also act as the Group's centre for product development. A number of new products has been developed with the hope that they can hit the market within the next few months.
Commitment to provide highest quality products and services has always been the Group's top priority. The Group's devotion to quality was rewarded in October 2000 by winning the 2000 Hong Kong Awards for Industry - Industry and Trade Department Quality Award by Yau Lee Wah. We believe we are the first building components manufacturer to received this annual award. With this significant encouragement, the Group and all its employees will further uphold our commitment to quality.
With the continuous recovery of the Hong Kong economy, a stable outlook is expected for the construction industry. The Group with its ample experience and resources will continue to look for opportunities in the construction and related sectors.
PURCHASE, SALE OR REDEMPTION OF SHARES
There was no purchase, sale or redemption of the Company's shares by the Company or any of its subsidiaries during the six months ended 30th September, 2000.
CODE OF BEST PRACTICE
In the opinion of the Directors, the Company has complied with the code of best practice as set out in Appendix 14 of the Listing Rules of the Stock Exchange of Hong Kong Limited throughout the period under review.
By order of the Board
Wong Ip Kuen
Chairman
Hong Kong, 18th December, 2000
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