Pacific Textiles spins HK$555.7m earnings on robust demand

PUBLISHED : Tuesday, 10 July, 2007, 12:00am
UPDATED : Tuesday, 10 July, 2007, 12:00am

Pacific Textiles Holdings, which raised HK$1.8 billion in an initial public offering in May, said net profit for the past year surged 21.1 per cent as sales increased amid rising demand from apparel manufacturers.

Net profit rose to HK$555.7 million for the year to March from HK$458.9 million a year earlier. Sales increased 25 per cent to HK$4.203 billion.

Pacific Textiles, which supplies fabrics to apparel brands including Calvin Klein, Liz Claiborne, Maidenform, Marks & Spencer, Triumph, and Uniqlo, produced 22 per cent more fabrics totalling 154 million pounds last year.

Management was confident about the global textile market especially in the mainland, said chairman Wan Wai-loi.

'We are of the opinion that the safeguard quotas on manufactured garments in China for the EU markets will be lifted as planned from January 1, 2008, further lifting the country's garment manufacturing sector,' Mr Wan said.

The company, which had textile mills in Guangdong province and Sri Lanka, would proactively take advantage of the continuing migration of the garment industry to Asia, particularly to the mainland, he added.

Pacific Textiles said in its listing prospectus that about HK$700 million of the stock offering proceeds would be used to fund expansion and upgrade its production facilities.

However, Mr Wan also said management would remain vigilant and mindful of the challenges faced by the overall manufacturing industries in the mainland.

These challenges include possible continuing currency appreciation, potential rising labour costs, changes in the taxation system and further reductions in the export tax rebate.

Shares of Pacific Textiles rose 4.4 per cent, closing at HK$5.40 yesterday before the earnings announcement.