Pacific Textiles Holdings Limited a leading manufacturer of customized knitted fabrics, announced its annual results for the year ended 31 March 2008 (“FY2008”). The FY2008 financial year was a challenging year for the Group and the textiles industry.
Uncertain economic environment brought by the subprime crisis, surging raw material costs, together with the rising overheads in China and the appreciation of the Renminbi all contributed to a tough and volatile operating environment during the year.
However, in spite of the challenging market conditions, the Group sustained growth in both sales revenue and volume during the reporting period.
During the year under review, the Group’s sales volume reached 155 million pounds. Revenue amounted to HK$4,280.6 million, representing an increase of 1.8% as compared to last financial year.
With the surging crude oil and commodity prices that had led to an increase in the costs of yarns, fuel, dyestuff and other raw materials, gross profit for the year and operating profit declined to HK$ 696.9 million and HK$ 453.5 million respectively.
Profit attributable to equity holders was HK$ 392.1 million, representing a decrease of 29.4%. The Board of Directors has proposed a final dividend of HK7.5 cents per share.
Together with the interim dividend of HK6.5 cents per share, the total dividend for the financial year will be HK14 cents per share.
Business Review:
In face of a challenging operating environment, the Group continued to leverage on its core competencies to maintain a solid business operation.
During the year, the Group invested considerably in upgrading production equipment as well as advancing supporting facilities in Panyu, Guangdong to enhance manufacturing processes.
The completion of these facilities has put in place the necessary infrastructures to meet the Group’s expansion in the next two to three years.
Expansion plan to double production capacity at the production plant in Sri Lanka was also fully completed and production volume will be increased progressively in the coming financial year.
These new developments further enhanced the Group’s manufacturing capabilities and operating efficiency, and enabled the Group to sustain its competitive edges in order to capture future growth opportunities.
During the reporting year, the Group continued to maintain close collaborations with apparel brand owners to develop fabrics that meet customized-order preferences.
Well established relationships with leading brands such as Calvin Klein, Liz Claiborne, Maidenform, Marks & Spencer, Triumph, UNIQLO, VF Intimates and Victoria’s Secret, allowed the Group to enjoy stable purchase orders. During the year, 44.5% of the Group’s overall sales revenue was drived from its top five brand owners.
Besides maintaining close relationships with its existing customers, the Group was also actively exploring opportunities to diversify geographically, particular into China’s domestic market, during the reporting period.
The management sees the PRC market with huge potential and the Group shall continue to deploy more resources into this new business arm. During the year, the Group expanded its China domestic sales team to further penetrate into this enormous market.
During the reporting period, SPM Automotive Textile Co Ltd., the Group’s automotive fabric joint venture with Suminoe Textile Co Ltd and Marubeni Corporation, made satisfactory progress.
Initial product development was completed and sales began to take off. Progress of Fillattice-Pacific Limited, the Group’s 50/50 joint venture with Fillattice S.p.A., was also on track and sales have begun in the third quarter of the year under review.
Business Outlook:
Commenting on the future strategy of the Group, Mr. Wan Wai Loi, Chairman of Pacific Textiles said, “Looking forward, although the uncertain economic climate in the US will still impact the operating environment of the fabric manufacturing industry, we are confident to maintain the Group’s competitiveness by exercising stringent cost-control strategies and pursuing market diversification.
We are confident about the global textile market, especially in China. We shall continue to leverage on our established clientele and our unique positioning with value-added products and services, to further expand into the PRC market and capture the enormous opportunities brought by the growing demand of the domestic apparel market.”
In addition to its continuous effort to strengthen and consolidate its leading position in manufacturing complex, value-added fabrics, Pacific Textiles will also continue to further explore other markets, including the non-apparel products, to further broaden its customer base.
Research and development efforts will be put on developing new types of valued-added fabrics to enhance profitability in the long run.
At the same time, the Group will continue to explore potential strategic partnerships that will create added value and synergistic benefits to its existing business.
Mr. Wan concluded, “With our unique positioning with value-added products and services, strong manufacturing capabilities in complex fabrics and solid financial position, we are confident that the Group possesses the competitive attributes and qualities to further consolidate our market leadership position and take us into the next level.”
source:fibre2fashion.com
