Walker Group 2010 profit up 7.6 times to HK$25mn

The company aims to open 150 new sales points to exploit growing market demand.

Walker Group Holdings Limited (“Walker Group”), after business restructuring has achieved encouraging results in the last financial year, with net profit rising by 7.6 times to HK$25 million.

For the year ended 31 March 2011 (“FY2011”), Walker Group’s turnover increased by 14.2% to approximately HK$1,299 million, mainly attributed to the rise in average selling price and addition of sales points within the PRC. By adopting effective inventory controlling measures, cost of sales compared to total sales dropped to 40.5% from 42.6%. Gross profit rose by 18.2% to approximately HK$772 million, representing a gross profit margin of approximately 59.5% (FY2010: approximately 57.4%).

As a result of revenue growth and improved profit margins, the Group registered a 7.6 times increase in profit attributable to equity holders to HK$25 million. Basic earnings per share also surged by 7.6 times to HK$4.04 cents. The Board proposed a final dividend of HK$2.5 cents per share for the financial year ended 31 March 2011. (FY2010: Nil)

The Group maintained a healthy financial position during the year. It had no bank borrowings, and had cash and cash equivalent amounting to approximately HK$136 million (FY2010: HK$171 million) as at 31 March 2011.

Ms May Chan, Chairperson of Walker Group, said, “Our efforts at restructuring and expanding sales paid off in the last financial year. As we observed the continued recovery of the global economy, rising consumption and economic growth in the PRC, the Group intensified our efforts on expanding our retail network in the region and revamping our product and market mix during the year. These efforts resulted in very good profit and position us to tap the immense growth opportunities in the near future”.

Looking ahead, the Group is optimistic about the retail business potential in the PRC. Walker Group is expanding its sales network in first- and second-tier cities to further enhance its presence in the rapidly growing foodwear market. In Hong Kong, it is continuing to identify and run shops in prime economically viable locations. As a whole, the Group intends to open approximately 150 new sales points in the Greater China region during the coming year. Meanwhile, it is also exploring opportunities in other overseas markets, in particular Southeast Asian countries.

Besides, marketing efforts will be launched to capture the attention of target consumers. The Group will mount advertising campaigns through different media channels, such as but not limited to newspapers, magazines and outdoor venues to arouse attention leading to purchase. There would be cross-selling promotional activities in collaboration with well-known international brands and celebrity endorsements, where appropriate to maximise exposure of its various brands, according to a Walker Group report.

In addition, the Group will continue to invest more resources in product design and closely collaborate with supplying manufacturers on applying new materials and developing technologies to enhance the quality and functions of the Group’s products. Futhermore, the upgraded information technology systems for the warehouses, shops and concessions in the PRC and Hong Kong are expected to further increase distribution efficiency and minimise work wastage, enabling more cost-effective business performance.

Ms Chan concluded, “In the PRC, there are still vast undeveloped markets and huge potential for the Group to exploit. Both the Group’s presence and recognition of its brands have already been growing in the region during recent years, supported by its expanding sales network. With this strong foundation coupled with appropriate business strategies, we are optimistic about our long-term growth prospects”.