Corporate News
Willas-Array Posts 47% Increase In Net Profit To HK$35 Million For FY2004
- Revenue rises 39% to HK$1.8 billion; bolstered by strong growth in China
- Group implements 3-year Growth Plan to further enhance earnings
| Financial Highlights HK$'m |
12 months ended 31 March 2004 |
12 months ended 31 March 2003 |
% Change |
| Revenue |
1,764.7 |
1,270.2 |
+ 39 |
| Profit Before Tax |
43.7 |
30.8 |
+ 42 |
| Net Attributable Profit |
35.1 |
23.8 |
+ 47 |
Singapore - 26 May 2004 - 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 a sterling set of financial figures for full year ended 31 March 2004.
Group revenue for FY2004 rose 39% to HK$1.8 billion compared with HK$1.3 billion previously, boosted by strong contribution from the Group's operations in China.
Net attributable profit rose 47% to HK$35.1 million, against HK$23.8 million achieved in FY2003.
Based on weighted average number of ordinary shares in issue, earnings per ordinary share rose 38.3% to 12.39 HK cents compared to 8.96 HK cents previously, while net asset value per ordinary share increased 13.5% to 98.79 HK cents from 87.07 HK cents.
"This has been a phenomenal year," said Mr Lawrence Leung, Chairman of Willas-Array. "Based on every measure, Willas-Array today is in the best position in its corporate history. Our strong financial performance reflects the significant progress we are making in China. Our commitment to China began more than 14 years ago when we saw the growing potential of the electronic components industry. This strategic move has been critical to our growth as China has since grown to become the world's manufacturing hub."
Indeed, reflecting the spectacular growth, the Group's direct sales to China leaped 111% to HK$536.0 million from HK$254.2 million previously. This increase in sales volume from China was primarily due to the Group's concerted efforts aimed at broadening its customer base, and expanding its territorial coverage and product segments in China.
Elsewhere, Hong Kong, which remains the biggest contributor accounting for 62% of Group turnover, saw a modest 14% increase in sales to HK$1.1 billion from HK$954.4 million previously.
Revenue from "other" markets, which consists mainly of South Korea, Singapore and Malaysia, rose more than 2 folds to HK$139.7 million from HK$61.6 million. This was attributed mainly to the two joint venture companies in South Korea which were set up in May 2002 and March 2003 to act as a distributor for ST Microelectronics Asia Pacific (Pte) Ltd and Conexant Systems, Inc. respectively.
During the period under review, the higher revenue was offset partially by lower gross profit margins of 10.1%, compared to 11.8% in the previous year. This was the result of the Group's strategy to adopt competitive pricing in a conscious effort to pursue volume and increase the scale of the business.
On the operating expenses level, administrative expenses have been contained to an increase of 18% despite a much larger 39% increase in sales revenue. Distribution expenses, however, have increased 36% to HK$23.2 million brought about by an increase in sales incentive and transportation charges which corresponded to the increased sales volume.
Balance Sheet
The Group continued to generate good cashflow during the year, bringing the total cash balances as at the end of 31 March 2004 to HK$270.1 million compared to HK$148.6 million last year. Net current assets also increased from HK$204.1 million in FY2003 to HK$308.0 million in FY2004. Both inventory and receivable turnovers remained at a manageable level of 2 months.
Dividend
In view of the continued profitability of the Group and to reward loyal shareholders, Directors have recommended a first and final dividend of 1.2 Sing cents (5.461 HK cents) per ordinary share which will be paid to shareholders on 24 August 2004. At the closing share price of 20.5 Sing cents on 24 May 2004, this represents a net dividend yield of 5.85%.
Outlook
The electronics industry's broad-based growth and continued upward momentum across all product sectors and geographic markets seem to indicate a year of strong growth for FY2005. To ride on this industry uptick, and to drive the Group's next phase of growth, the Management has developed a 3-year Growth Plan which was kickstarted in early 2004.
Commenting on the 3-year Growth Plan, Mr Leung said, "The roadmap for our growth plan covers three core areas - market expansion, industry breadth and depth, and human resource management. For market expansion, our focus continues to be China as we see tremendous growth opportunities there. Through leveraging on the strengths of our Application and Development team, we hope to achieve greater revenue contributions from existing industry segments while targeting other high growth market segments. Also, we will continue to proactively engage our staff in accepting greater challenges and to take ownership of the company's performance through ongoing skills upgrading and training programmes."
Mr Leung added, "We have, over the years, continually worked at building and refining our essential assets which enable us to face any environment with confidence. By leveraging on the strengths of the company and through delivering on the three core components in our 3-year Growth Plan, we believe we will be able to take the Group to the next level of growth."
About Willas-Array Electronics (Holdings) Limited
Established in the early 1980s and listed on the Main Board of the Singapore Exchange in 2001, Hong Kong-based Willas-Array is principally engaged in the distribution of active and passive 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 China.
In China, Willas-Array has established a network of offices strategically located in Beijing, Qingdao, Shanghai, Chengdu, Xiamen, Guangzhou and Shenzhen as well as an Application and Development Division in Guangzhou. It has subsidiaries in the Free Trade Zones in Shanghai and Shenzhen, both of which serve as logistics centres for the Group in North and South China. In South Korea, Willas-Array has two joint ventures, which commenced operations in May 2002 and March 2003 respectively.
