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HONG KONG, Nov 30, 2010 - (ACN Newswire) - Longrun Tea Group Company Limited ("Longrun Tea Group" or the "Group"; stock code: 2898) announced its interim results for the six-month ended 30 September 2010.
-- Turnover soared over 3.2 times to HK$195,567.000 driven by contributions from the tea business and other food product business
-- Business turn-around with profit attributable to shareholders reached HK$33,148,000
-- Earnings per share increased to 2.31 HK cents
For the six months ended 30 September 2010, the Group reported a substantial growth in turnover while executing a successful business turnaround. Turnover of the Group soared 3.2 times to approximately HK195,567,000 (2009/10 interim: HK$46,045,000) whereas gross profit increased by 2.7 times to HK$78,088,000 when compared with the corresponding period last year. The increase was primarily attributable to contributions derived from the Group's tea and other food product businesses during the period under review.
Profit attributable to shareholders of HK$33,148,000 was achieved compared to a loss attributable to shareholders of HK$33,650,000 for the corresponding period last year. The surge in profit was the result of the Group's successful business restructuring of which its strategic emphasis on the tea business has begun to bear fruit and contributing significant growth during the period under review. Basic earnings per share were 2.31 HK cents against a loss per share of 4.21 HK cents in the corresponding period last year.
The Group continued to maintain a healthy liquidity position and has sufficient financial resources to meet ordinary operational and capital expenditure requirements. As at 30 September 2010, the Group had approximately HK$24 million in cash and cash equivalents. The Group's gearing ratio as at 30 September 2010 was maintained at 21.6%.
Dr. Chiu Ka Leung, Chairman of Longrun Tea Group Company Limited, said "We are very pleased that the Group reported substantial improvements in its financial results during the period under review which was mainly due to its diversification into the tea market in China. Riding on the global economic recovery and our successful marketing strategies on developing tea and other food product businesses in the PRC, Longrun Tea Group was able to turn-around its business and record significant growth."
Tea and Other Food Product Businesses
During the period under review, the Group has been actively expanding the distribution network of "Longrun" branded products, including both self-operated and franchised stores in the PRC market. This strategy delivered significant growth to the Group's tea and other food products business, generating turnover of HK$172,365,000 which represented 88.1% of the Group's total turnover.
In addition, the Group opened its first mega retail outlet in Kunming targeting tourists in July 2010. This mega retail outlet is located in Kunming International Convention Centre and is of close proximity to the Kunming Wujiaba International Airport. With a floor area of about 25,000 square feet and operating 24 hours a day, this mega retail outlet is designed to target both domestic and international tourists travelling to Yunnan Province. Turnover derived from this mega retail outlet were satisfactory and given the robust growing tourism in Yunnan Province, the prospect of this mega retail outlet is promising.
In October 2010, the Group completed the acquisition of "Tea Story" - a trendy teahouses franchise operation in the PRC. Currently the Group's "Tea Story" network comprised of more than 360 franchised teahouses mainly located in Hunan, Yunnan, Guangdong and Zhejiang Provinces. This acquisition will help strengthen the Group's presence in the trendy teahouse market and to reach the younger segment of China's consumer market. It will also enable the Group cross-selling different tea and food products in trendy teahouses.
Healthcare and Pharmaceutical Business
During the period under review, the Group's healthcare and pharmaceutical products business continued to make a steady contribution. Turnover from this division was approximately HK$23,202,000, accounting for about 11.9% of the Group's total turnover.
Prospects
Looking forward, the Group continues to sharpen its competitive edge by expanding its distribution network and customer base for its tea business. Given Yunnan Province is one of the most popular tourist destinations in China, the Group will further leverage on its unique location advantage to tap into the tourist related market in Yunnan Province. In addition, the Group's "Tea Story" trendy teahouses franchise operation is expected to provide contribution in the 4th quarter of this financial year and we intend to expand this franchise network across all major cities in the PRC.
In October 2010, the "Longrun" brand has been awarded the China Well-known Trademark by the Trademark Office of The State Administration for Industry & Commerce of the PRC. Such achievement represents high level recognition of product quality and popularity of the "Longrun" brand tea products in the PRC. The Group will leverage on such enhanced awareness of "Longrun" brand to further expand its distribution network and customer base.
"Moving ahead, we are optimistic about the booming tea market in the PRC. The Group intends to allocate more resources in expanding its tea and other food products business, and, at the same time, continues to explore and pursue potential mergers and acquisitions that can enlarge market share and boost its presence in the food and beverage sector. With many accomplishments in the first half year and more progress since then, the management remains positive about the Group's performance during the rest of the year." Dr. Chiu concluded.
Contact:
Strategic Financial Relations Limited
Heidi So
+852 2864 4826
heidi.so@sprg.com.hk
Maggie Au
+852 2864 4815
maggie.au@sprg.com.hk
Coco Wong
+852 2114 4951
coco.wong@sprg.com.hk
Fax: +852 2804 2789 / 2527 1196
http://www.sprg.com.hk
Topic: Earnings
Source: Longrun Tea Group
Sectors: Retail & eCommerce
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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