INTERIM RESULTS
The Board of Directors of Yau Lee Holdings Limited (the "Company") announces the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30th September, 1999, together with the comparative figures for the corresponding period in 1998 are as follows:
Six months ended
30th September
1999 1998
HK$'000 HK$'000
Turnover 860,840 860,885
========== ==========
Operating profit 9,731 8,339
Share of profit/(loss) of
associated companies 1,272 2,683
---------- ----------
Profit before exceptional items
and taxation 11,003 11,022
Exceptional items (Note 1) 3,346 -
Taxation (Note 2)
Company and subsidiaries (1,800) (1,602)
Associated companies (448) (345)
---------- ----------
(2,248) (1,947)
---------- ----------
Profit after taxation 12,101 9,075
Minority interest (636) (1,804)
---------- ----------
Profit attributable to shareholders 11,465 7,271
Interim dividend - -
---------- ----------
Retained profits for the period 11,465 7,271
========== ==========
Earnings per share (Note 3) 0.97 cents 0.92 cents
========== ==========
Notes:
(1) Exceptional Items
Exceptional items comprises
1999 1998
HK$'000 HK$'000
Gain on disposal of
associated companies 4,079 -
Loss on disposal of an
investment property (733) -
------ ------
3,346 -
====== ======
(2) Taxation
Hong Kong taxation is provided at the rate of 16% (1998: 16%) on the estimated assessable profits of each individual company comprising the Group for the period.
(3) Earnings per share
Earnings per share has been calculated using the unaudited consolidated profit attributable to shareholders for the period of HK$11,465,000 (1998: HK$7,271,000) and the 1,180,656,268 ordinary shares (1998: 787,104,179 ordinary shares) in issue during the period. No diluted earnings per share is disclosed as the outstanding share options at 30th September, 1999 and 30th September, 1998 are anti-dilutive.
INTERIM DIVIDEND
The Board of Directors of the Company ("the Directors") does not recommend the payment of an interim dividend for the six months ended 30th September, 1999 (1998: Nil)
BUSINESS REVIEW AND PROSPECTS
The Group's turnover for the six months ended 30th September, 1999 was HK$860,840,000 (1998: HK$860,885,000) which remained stable when compare with the turnover of the same period last year. However the operating profit has increased by 16.7% to HK$9,731,000 compare with HK$8,339,000 of 1998. During the period, the Group has disposed a substantial portion of its investment in a listed associated company and the entire interest in a non listed associated company. The gain on such disposals are set out in Note 1 on page 1.
The Group's continuous imposition of effective cost control measures and effort to significantly reduce bank borrowings and the contribution from the Group's wholly owned precast products factory set up in 1998 in Shenzhen was the main contributors to the improved results for the period.
During the period under review, the Group has completed the redevelopment of Homantin South Phase 1 with a contract value of HK$484 Million and secured a contract with contract value of HK$395 Million. The total value of contracts on hand at 30th September, 1999 was HK$5,034 Million compare with HK$3,465 Million at 30th September, 1998. The Group's precast products factory in Shenzhen commenced operation at the beginning of the period and has been operating at its full capacity since mid 1999.
In order to further improve the Group's working capital structure, the Board of Directors announced, on 23rd November, 1999, a rights issue of one rights share for every two shares held to raise approximately HK$61,000,000 after expenses. The fund raised will be utilised by the Group as additional general working capital and additional working capital for future tenders.
With the recent signs of improvement of the economy in Hong Kong and the stable outlook of the public construction sector, the Group will continue its focus in this area. To capture the opportunities, the Group will remain active in tendering for public sector construction contracts and the manufacturing and marketing of building component products. In order to remain competitive, the Group shall continue to improve efficiency, tighten cost control and to develop new products and technologies to keep abreast of the market evolvement.
CONTRACTS ON HAND
The following is a summary of the Group's construction contracts on hand at 30th September, 1999:
Original
Contract value
HK$ million
Development of Fanling Area 49A, Phase 1 761
Development of Ma Hang Village, Phase 2 575
Regional Term Contract N3 & N4 160
Design and Construction of Maintenance Depot at
Siu Ho Wan in Lantau 304
Development of Cheung Sha Wan West, Phase 1 804
Development of Cheung Sha Wan West, Phase 2 752
Development at Po Lam Road, Phase 4 860
Tuen Mun Polyclinic at Tuen Mun Hospital 366
Workshop conversion and Fitting-out Works for
implementing the New Technical Curriculum in
Prevocational and Technical Schools 57
Design and construction of Government Quarters at Fanling 395
------
Total 5,034
======
DIRECTORS' INTERESTS
As at 30th September, 1999, the following Director had or was deemed to have interests under the provisions of the Securities (Disclosure of Interests) Ordinance (Chapter 396 of the Laws of Hong Kong) (the "SDI Ordinance") in the Company or any associated corporations thereof (within the meaning of the SDI Ordinance) of which, the Company and The Stock Exchange of Hong Kong Limited had to be notified pursuant to Section 28 of the SDI Ordinance (including interests which the Director is deemed or taken to have under Section 31 or Part I of the Schedule of the SDI Ordinance) and which were required to be entered into the register kept by the Company pursuant to Section 29 of the SDI Ordinance:
Number of shares
Director Company interested
Mr. Wong Ip Kuen Yau Lee Holdings Limited 371,856,063
Note: The 371,856,063 shares of the Company referred to above were registered in the name of All Fine Investment Company Limited. Mr. Wong Ip Kuen owns the entire issued share capital of All Fine Holdings Company Limited which owns the entire issued share capital of All Fine Investment Company Limited, both of which are companies incorporated in the Cook Islands. Mr. Wong Ip Kuen is a director of both All Fine Holdings Company Limited and All Fine Investment Company Limited.
During the six months ended 30th September, 1999, no right to subscribe for equity of the Company was exercised by any of the Directors or chief executives of the Company or the spouses or children under 18 years of age of such Directors and chief executives.
Save as otherwise disclosed in this report, none of the Directors or chief executives or their associates had any other interests (whether beneficial or non-beneficial) in the share capital of the Company or any other associated corporations as defined in the SDI Ordinance as at 30th September, 1999.
SHARE OPTION SCHEME
On 25th August, 1997, pursuant to the Share Option Scheme, the Directors were granted options to subscribe for a total of 29,000,000 shares of HK$0.05 each in the Company. Subject to the adjustment as a result of any alteration in the capital structure of the Company, the subscription price is the higher of 80% of the average closing price of the shares of the Company on The Stock Exchange of Hong Kong Limited on the five trading days immediately preceding the date of granting of the option and the nominal value of the shares. The above Directors have not exercised any of their options during the year. Details of the options granted to the Directors are as follows:
Number of
shares of
Name Date of grant options granted
Mr. Wong Ip Kuen 25th August, 1997 12,000,000
Mr. Wong Tin Cheung 25th August, 1997 11,000,000
Mr. Sun Chun Wai 25th August, 1997 1,500,000
Mr. So Yau Chi 25th August, 1997 1,500,000
Dr. Yeung Tsun Man, Eric 25th August, 1997 1,000,000
Mr. Leong Ka Chai, O.B.E., J.P. 25th August, 1997 1,000,000
Mr. Wu King Cheong 25th August, 1997 1,000,000
Save as otherwise disclosed in this report, at no time during the year was the Company or any of its subsidiaries a party to any arrangements to enable any of the Company's Directors or members of its management to acquire benefits by means of acquisition of shares in, or debentures of, the Company or any other body corporate.
SUBSTANTIAL SHAREHOLDERS' INTERESTS
As at 30th September, 1999, the following persons (other than the Directors or chief executives of the Company) had or were deemed to have interests in the Company under the provisions of the SDI Ordinance which have been entered into the register kept by the Company under Section 16(1) of the SDI Ordinance:
Number of shares
Substantial shareholders interested
All Fine Investment Company Limited 371,856,063
(see Note on page 4)
All Fine Holdings Company Limited 371,856,063
(see Note on page 4)
YEAR 2000
The Group has adopted the Year 2000 ("Y2K") compliance standard set by the British Standards Institute which, in simple terms, means neither performance nor functioning of computer or other electronic equipment of the Group will be affected by dates prior to, during and after the year 2000.
A Y2K Compliance Committee consists of senior executives, representatives from different functional departments of the Group and Information Technology Department was set up in 1997 to tackle the issue. Regular meetings were held to monitor the progress of the compliance work. The Directors of the Group were also being updated with the progress of the compliance work regularly.
The Group's Y2K compliance work include testing and upgrading of all mission critical systems and equipment and contingency planning to deal with mitigate risk of business disruptions due to Y2K. Non compliant systems or equipment were either upgraded or replaced. Similar practice has been adopted to the Group's suppliers and subcontractor. Contingency plans for all mission critical operations were formulated in September 1999.
The cost incurred by the Group for Y2K compliant did not have a significant impact to the Group's operating results.
With the efforts already put onto the issue, barring any unanticipated circumstances, the Group is confident that the continuance of services to our customers will not be disrupted.
CODE OF BEST PRACTICE
None of the Directors is aware of information that would reasonably indicate the Company is not, or was not, in compliance 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.
PURCHASE, SALE OR REDEMPTION OF SECURITIES
There was no purchase, sale or redemption of the Company's securities by the Company or any of its subsidiaries during the six months ended 30th September, 1999.
By order of the Board
Wong Ip Kuen
Chairman
Hong Kong, 29th December, 1999
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