Le Saunda net rises 32pc on home sales

PUBLISHED : Wednesday, 21 June, 2006, 12:00am
UPDATED : Wednesday, 21 June, 2006, 12:00am

Le Saunda Holdings said profit rose 32.3 per cent last year, partly driven by property sales in the mainland.

The footwear retailer yesterday announced net profit of $90.15 million for the year ended February, compared with $68.14 million in the previous year.

Turnover swelled to $720.37 million from $567.51 million.

Earnings per share rose to 17.8 cents from 14.8 cents but the company has proposed to keep the final dividend unchanged at 4.5 cents per share.

Le Saunda booked a gain of $20 million from the sale of remaining units at its residential project, Sunny Garden, in Shunde, Guangdong province.

President Eddie Wan Tat-wah said the company planned to open 200 stores over the next three years, mainly on the mainland.

Of the stores, 25 would focus on young people, he said.

The expansion would require an outlay of about $70 million.

To improve its profit margin, Mr Wan said the company would open outlets in mainland shopping centres.

In Hong Kong, Le Saunda's operating profit plunged 61 per cent to $14 million last year because of an average 40 per cent increase in retail rents while its mainland business increased 147 per cent to $47 million.

Mr Wan expected rental expenses in the second half of this year to account for 20 per cent of the company's turnover, compared with 25 per cent last year.

'Retail rents have stabilised,' he said.

During the previous financial year, the company closed down several outlets after the landlords asked for higher rents. Those stores were then moved to shopping centres where rents were cheaper.

'We are confident the net profit margin will be maintained next year, since the rental turnover will most likely be below 20 per cent, compared with 25 per cent now,' Mr Wan said.

Shares of Le Saunda rose 4.85 per cent to close at $1.08 yesterday.