Paul Y gross operating profit plunges 28pc

Construction company Paul Y Engineering posted a 28 per cent fall in gross operating profit to HK$166.5 million for the year ended March, according to its annual results released yesterday.

Behind the fall lay cost blowouts in construction bills, administrative expenses and finance charges that made a sizable dent in a 40 per cent reported increase in operating revenue to HK$4.36 billion for the year from HK$3.11 billion previously.

Administrative expenses rose by HK$21 million to HK$156.5 million and finance charges more than doubled from HK$3.3 million to HK$7.45 million.

On March 31, the company reported that it pledged bank deposits of approximately HK$43 million, property plant and equipment worth approximately HK$10 million and charged the group's benefits over certain construction contracts to secure the general banking facilities granted to the group.

Coming to the rescue of the company's bottom line against this bleak operating background, was a $74 million contribution from a 25 per cent stake in the revalued Paul Y Centre, versus a HK$2.77 million contribution in 2006, together with a large increase in 'other interest income' from HK$6.99 million in 2006 to HK$23.48 million.

The contribution helped lift net earnings attributable to shareholders by 12 per cent to HK$112.6 million and allowed the company to declare a final divided of 5.5 HK cents a share, up 10 per cent from the previous financial year.