HK to have US$50m Dairy Farm windfall
Retail conglomerate Dairy Farm International Holdings plans to invest US$50 million in Hong Kong this year on new retail outlets and renovations, and dispose of some of its local supermarkets.
The Singapore-listed company yesterday said that strong growth across Asia, combined with an exceptional gain of US$23 million from the sale of four Hong Kong operations, lifted its interim profit 91.44 per cent from the same period last year, when the region was in the grip of the Sars epidemic.
The firm, which operates the Wellcome supermarket chain and 7-Eleven convenience stores in Hong Kong, posted a net profit of US$85 million for the six months to June.
The sale of Hong Kong Ice & Cold Storage, two shopping centres in Repulse Bay and a warehouse in Fo Tan fattened company coffers US$84 million, of which $61 million will be booked in the second half of the year. Stripping out the exceptional gain would leave year-on-year growth of 40 per cent to US$62 million.
Group finance director Howard Mowlem said the group was looking at disposing of a few Wellcome stores. 'It is our strategy to lease instead of owning properties ... But the disposal is immaterial in scale, as these are small stores.'
He expects the group to invest US$120 million this year, of which $50 million would be set aside for Hong Kong.
In Hong Kong, the group operates 245 Wellcome stores, about 200 Mannings drugstores and more than 480 7-Eleven convenience stores. It also runs fast-food chain Maxim's and the local franchise for home furnishing chain Ikea.
Ed Chan Yiu-cheong, regional director for North Asia said the group's expansion plan included new stores on the mainland.
'We will open our first drug store, Mannings, either in Shenzhen or Guangzhou by the end of this year,' Mr Chan said.
During the first half, the group opened four Wellcome stores and completed 13 major refurbishments, he said. Chairman Simon Keswick said: 'The outlook remains broadly positive for the second half as Dairy Farm continues to focus on strengthening its leading retail positions in Asia.'
