Takings down, profits up as Dickson's concept pays
High-fashion retailer and distributor Dickson Concepts (International) saw net profits hit a 10-year high despite a fall in turnover after losing distribution rights for Polo Ralph Lauren in Southeast Asia.
Net profit rose by 14 per cent to HK$346.8 million for the year to March 31, despite a 6.3 per cent drop in turnover to HK$3.4 billion over the same period, reflecting the loss of Polo Ralph Lauren from January.
However, the company gained HK$163.6 million from the termination and expiration of distribution licences, up from HK$141million a year earlier.
In addition, it also earned more than HK$30 million in net foreign exchange and interest income from financial assets last year, compared to HK$4.6 million in the previous year.
Chairman Dickson Poon said he expected the closure of Seibu Pacific Place this month to bring 'a temporary loss' in profits this year. The shop will be replaced by a flagship store of British high-end brand Harvey Nichols, which will also be run by Dickson Concepts.
Poon dismissed any suggestion that Seibu would withdraw from Hong Kong, saying it was looking for sites for new stores. He added that the cessation of distribution rights of Tommy Hilfiger on the mainland last February might also affect profits.
The luxury-brand retailer, which runs 439 shops in Hong Kong, the mainland, Macau, Taiwan, Singapore and Malaysia, has opened 20 new shops since April for brands such as Brooks Brothers, Dickson Watch & Jewellery, S.T. Dupont and Hogan. It plans to open another 41 shops by the end of March 2012.
Currently, 54 per cent of the company's sales are generated from Hong Kong, 21 per cent from the mainland, 16 per cent from Taiwan and 9 per cent from the rest of Southeast Asia.
The company said it would launch Beauty Bazaar, a beauty concept store under the Harvey Nichols brand, in the mainland market and was exploring its potential elsewhere in Southeast Asia. It opened the first Beauty Bazaar in Hong Kong at The One on Nathan Road in Hong Kong in December.
The company, which holds more than HK$1 billion in cash, said it would take advantage of 'any investment opportunities of exceptional value'.
The company proposed a final dividend of HK20 cents per share.
Shares closed up 1.3 per cent, or HK8 cents, at HK$6.26 yesterday ahead of the results announcement.