US recovery to power doubling in Techtronic's sales
Techtronic Industries, a Hong Kong-based global power equipment and floor care company, aims to double sales in five years in a recovering US economy.
"Encouraging signs of demand in the US new residential construction sector and the oil, gas and energy industry signal a rebound in the US economy and will drive the development of infrastructure," Techtronic chief executive Joseph Galli said.
The firm yesterday announced record sales and profits for last year.
Group sales for the year rose 5.1 per cent to US$3.9 billion, while net profit jumped 32.2 per cent to US$201 million from US$152 million in 2011.
The United States contributes most of the company's sales, with about 70 per cent of revenue coming from North America.
"Customers love our products because they work better and last longer," Galli said. Techtronic's products include AEG and Ryobi power tools and Hoover vacuum cleaners.
"We are No1 in the US market for power tools, and there is a huge demand in the US for our products. We are gearing up for good growth this year."
The company's gross profit margin improved for the fourth consecutive year to 33.5 per cent from 32.6 per cent the previous year.
Improving gross profit margin and operational efficiency from the streamlining of operations cut working capital by 10 per cent, driving Techtronic's positive free cash flow to a record US$275 million, up from US$146 million in 2011.
Gearing was 25.8 per cent, less than half the 59.3 per cent for the previous year.
"Our disciplined implementation of the … strategic plan is yielding outstanding results across all of our business units and geographical regions," chairman Horst Pudwill said.
The company has been looking at entering the Hong Kong and mainland market for the last two years. It has an office in Shanghai and a factory in Dongguan, Guangdong province, and plans to showcase its products at an exhibition in Hong Kong this summer.
A final dividend of 10.75 HK cents per share is recommended. Together with the interim dividend of 6.75 HK cents, the total dividend for last year will be 17.5 HK cents per share.