China improvement helps Dickson earnings rise 19pc

Wholesaler and luxury goods retailer Dickson Concepts says a break-even result at its China operation, strong sales growth - particularly in Hong Kong - and cost control helped it boost attributable profit 19 per cent to $395.5 million in 1995-96.

The improvement in the China business followed a restructuring that led to a $17.5 million exceptional loss in the previous year.

Overall turnover at Dickson, which on Tuesday announced the $180 million purchase of 85 per cent of Hong Kong Seibu Enterprise, increased 11.1 per cent to $3.94 billion. Operating profit rose from $422.4 million to $516.3 million.

Operating margin rose to 13.1 per cent and earnings per share increased to 58.2 cents.

The group recommended a final dividend of 21 cents per share and the total dividend for the year is 33 cents per share.

Dickson executive chairman Dickson Poon said the group would book about a $655 million exceptional gain in the current year from the spin-off of its Harvey Nichols department store operation in London.

Harvey Nichols has retained ownership of its freehold property in Knightsbridge after the spin-off and it will receive annual rental income of $38.2 million.

Mr Poon said Hong Kong had achieved 30 per cent profit growth last year despite the territory's lacklustre retail market.

Taiwan has become the second largest Asian market with a double-digit profit growth and the group will open another 12 new shops there. But Mr Poon declined to reveal the break-down of revenue contribution by different markets.

He said part of the $100 million share subscription and $80 million shareholder loan injected into Seibu would pay back some of Seibu's debt. But it would not be debt-free after the acquisition.

He dismissed speculation that Dickson planned to buy other Japanese stores. The location for a Harvey Nichols in Hong Kong had not been decided yet, he said.