Winsor spin-off in property demerger
Textiles and clothing manufacturer Winsor Industrial Corporation, which yesterday reported a net loss for the 1996 fiscal year, has announced plans to demerge its property interests in a separate listing.
The company will submit an application to the stock exchange soon. It plans to distribute all the shares of a new company which controls its property interests to Winsor shareholders by special interim dividend.
After the demerger, Winsor will have no direct shareholding in the new company. It will concentrate on its core textile and clothing business, W. B. Lam, the company's director said.
He said no new shares or new funds would be raised through the demerger and listing.
Yesterday, the company announced a net loss of $51.19 million in the financial year to March 31, after taking charges on cutting more than 1,300 jobs and shutting down its businesses in Hong Kong and Malaysia.
The loss came after a net profit of $148.24 million in the previous financial year.
Winsor booked exceptional losses of $159.05 million in severance payments and the costs of shutting down and streamlining businesses in Hong Kong and Malaysia.
Its operating profit was down 22 per cent to $118.48 million, from $151.68 million the previous year.
Sales plunged by 22.4 per cent to $1.66 billion from $2.14 billion the previous year.
Losses per share were 20 cents, compared to profits of 57 cents previously.
Directors proposed a final dividend of 10 cents per share, down from 35 cents in the 1995 financial year.
In March, Winsor laid off 700 employees in Malaysia because of a slumping market for cotton fabrics.
Less than a year earlier, it dismissed 670 factory workers and shut two finishing mills in the territory.
The company controls industrial property interests in Hong Kong and commercial property development on the mainland, Singapore and the United States.
Winsor chairman W. H. Chou said the company had been hit by lower demand and falling product prices.
'General market conditions, which have not been kind for a long time, continued to be depressed,' Mr Chou said.
'The softening of cotton and wool prices only served to give buyers an excuse to further clamp down on the price of finished goods,' he said.
Sales from textiles and clothing were down 23.6 per cent to $1.55 billion from $2.03 billion.
Operating profit from that sector was down 54.3 per cent to $37.05 million from $81.13 million the previous year.
Its Malayasian factory posted an operating loss of $41.7 million.
Mr Chou said the company's property development, the Regent Centre, had been put up for lease with 96,000 square feet of tower B leased out.
Sales of tower A would only be launched when the industrial property market improved.
He said the company had received an interim dividend from its 18-per-cent-owned Shanghai East Ocean Centre phase I in Shanghai, and presales of phase II would start shortly.
Mr Chou said the company's 42.5-per-cent-owned Wuxi Zhong Cui Foods had been hit by intensified competition in its instant noodle business.
Mr Chou said after the consolidation, the company's garment and knitwear operations had performed satisfactorily, and it would be 'aggressively' looking into expansion opportunities.
BLEAK PICTURE Full-year net loss hits $51.19 million Exceptional losses $159.05 million Operating profit down 22pc to $118.48 million