Corporate News
Willas-Array Achieves Robust Performance With Revenue Hitting Record High Of HK$1.27 Billion In FY2003
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Net profit rose 12% to HK$23.8 million as Group taps into the recovery of the global electronics components industry
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Dividend of 4.49 HK cents (one Sing cent) represents yield of 5.1%
Singapore - 26 June 2003 - Willas-Array Electronics (Holdings) Limited ("Willas-Array"), one of the largest Hong Kong-based distributors of electronics components in the Asia Pacific region, today reported that revenue for the full year ended 31 March 2003 rose 33% to a record high of HK$1.27 billion, from HK$957.1 million previously.
Net profit after tax and minority interests rose 12% to HK$23.8 million, as compared to HK$21.2 million in the previous year.
Based on the existing issued share capital, earnings per share was up 6.5% to 8.96 HK cents compared to 8.41 HK cents previously, while net tangible asset per share rose to 87.07 HK cents from 82.26 HK cents.
On the strong achievement in revenue, Executive Chairman, Mr Lawrence Leung said, "We made significant progress during the year as we saw increased sales orders from both existing and new customers. This was a direct result of the implementation of new marketing strategies and renewed efforts to increase our market share and maintain dominance in existing markets. We also saw maiden revenue contribution from our joint ventures in South Korea which started operations in May last year."
He added, "By working diligently with our principals to increase the depth and scope of our product offerings, we were able to ride on the upswing in the global electronics components industry."
However, the rise in revenue was offset to some extent by an increase in operating costs. As a result of start-up expenses in South Korea and the new logistics centre in Shanghai, and higher staff costs due to increased staff strength and training costs, the Group's distribution and administrative costs rose 27% to HK$126.2 million.
"We are laying the foundation for future growth as we see proper staffing and training as necessary investments that will help the Group stay ahead in the marketplace. Expanding our operations to new markets gives us more than just opportunities in existing business, it opens up possible new avenues of growth. We expect return on these investments in the coming years." said Mr Leung.
Dividend
In view of the continued profitability of the Group and to reward loyal shareholders, directors have recommended a first and final dividend of 4.49 HK cents (one Sing cent) per ordinary share which will be paid to shareholders on 23 September 2003. At the closing share price of S$0.195 on 25 June 2003, this represents a net dividend yield of 5.1%.
PRC & HK
Sales to Hong Kong-based customers rose 31% to HK$954.4 million while contribution from this segment rose by 38% to HK$60.3 million.
While direct sales to PRC customers grew by almost 19% to HK$254.2 million, contribution from this segment fell to HK$0.9 million from HK$5.3 million. This was due to increased staff costs as the Group continues to strengthen its operations in the PRC.
Others
Revenue from "other" markets, which consists mainly of South Korea, Singapore and Malaysia, rose more than 4 times to HK$61.6 million. This was attributed mainly to the joint venture in South Korea which was set up in May 2002 to act as a distributor for ST Microelectronics Asia Pacific (Pte) Ltd. However, the initial start-up costs in South Korea resulted in a loss for that segment for current year.
"We have been seeing rising volumes in South Korea which is very encouraging, and with the start of our second joint venture in March this year to represent Conexant Systems, Inc., we are confident that volumes will continue to increase. We expect South Korea to start contributing to the bottomline in the next one to two years." said Mr Leung.
Balance Sheet
The Group continued to generate good cashflow during the year, bringing the total cash balances as at the end of 31 March 2003 to HK$148 million, or cash per share of 55.8 HK cents (12.4 Sing cents). Bank borrowings stood at HK$29.1 million, while inventory turnover remained at a healthy level of 2.0 months.
Outlook
The current market condition has improved as compared to the same period last year. The directors are optimistic about the prospects for the next 12 months with the gradual recovery of the global economy. To-date, the Group's expansion plans and operations have not been materially and adversely affected by the repercussions due to the outbreak of the severe acute respiratory syndrome (SARS).
Mr Leung said, "While the Group further tightens controls to improve operational efficiency, it will leverage on its strong balance sheet to seek new opportunities for growth. With new marketing strategies and intensified sales efforts, we will continue to focus on South Korea and the PRC as we see South Korea as a market with tremendous growth potential in communications and communications-related industry, while the PRC will continue to be one of the three largest markets for electronic components with the strong growth in output of electronics products."
About Willas-Array Electronics (Holdings) Limited
Established since the early 1980s, Hong Kong-based Willas-Array is principally engaged in the distribution of active and passive electronic components for use in the audio/video, telecommunications, industrial, consumer and computer segments. Backed by long-standing relationships with over 20 reputable Principals, Willas-Array carries a wide product mix distributing and marketing in excess of 10,000 product items which cater to over 2,000 active customers. Its main markets are in Hong Kong and the PRC.
In the PRC, Willas-Array has established a network of representative offices strategically located in Beijing, Guangzhou, Shanghai, Shenzhen, Qingdao, Xiamen, as well as an Application and Development Division in Guangzhou. It has a subsidiary in the Free Trade Zone within Shanghai that will serve as a logistics centre for the Group in China. In South Korea, Willas-Array has two joint ventures which commenced operations in May 2002 and March 2003 respectively.
