AN uncertain property outlook this year was behind the decision by Kwong Sang Hong International directors to cut the final payout to shareholders. The company announced yesterday that despite a 1.6 per cent increase in profit attributable to shareholders for 1994 to $254.3 million, the company would pay out only 10.5 cents a share for the second half of last year compared with 13.5 cents in 1993, preferring to hold more cash in reserve. 'As a consequence of higher interest rates and a more restrictive bank lending environment in Hong Kong, the directors of the company have resolved to adopt a more conservative dividend policy than in the past,' a Kwong Sang Hong statement said. With the interim dividend of 9.5 cents per share, the total dividend for the year to December 31 was 20 cents a share, 13 per cent lower than the 23 cents a share paid in 1993. In defence of the move, directors said that the total dividend per share in 1994 represented 46 per cent of earnings per share, still higher than the norm for a property development company. Basic earnings per share were down nine per cent to 43.2 cents, compared with 47.5 cents a share in 1993. However, profit retained from that year rose 4.4 per cent from $127.4 million to $133.1 million. In his formal annual results statement, chairman Philip Tose said: 'Nineteen ninety-four will be remembered as a difficult year for the property sector, given the anti-speculation measures introduced by the Government to control property prices, the tightening of credit, and the worldwide increase in interest rates. 'Against this backdrop, the group adopted a conservative expansion strategy with the addition of only three properties during the year.' He said the significant transactions conducted during the year in terms of profits were the completion of sales of 43 to 45 Lyndhurst Terrace and 16 to 19 Tai Pak Terrace. Property trading profits contributed about 70 per cent of total revenue for the year. The sale of 420,000 square feet of space in the Kwong Sang Hong Centre in Kwun Tong was completed during the year. All residential units and more than 60 per cent of retail space in Park Mansions in Ngau Tau Kok were also sold. Marketing was also reported to be progressing steadily for the remaining 200,000 sq ft of space in Hing Wai Centre, Aberdeen. The group's rental income in 1994 was about $46 million. On the cosmetics side, where the company has its roots, directors said healthy growth was recorded in all major distribution sectors with total value of sales increasing 27 per cent year-on-year. Despite an overall decline in consumer demand late in the year, The House of Kwong Sang Hong's retail shops posted sales growth of 31 per cent. In other distribution outlets, such as Watson's and ParkN' Shop, the company's Two Girls brand of toiletries recorded a strong performance, with sales rising 24 per cent. Mr Tose said: 'While 1995 is expected to be a more difficult year than 1994, the group is well positioned to take advantage of opportunities as they arise. 'The medium to long-term economic outlook for Hong Kong and China remains positive, although in the short term, the Government's anti-speculation measures in Hong Kong, high interest rates worldwide, as well as the on-going austerity drive in China will continue to influence the property market negatively.'