Had Leung Kee Holdings directors hoped the purchase of a controlling stake in Sharp Brave in 1994 would improve their corporate profits, they would have been wrong. Ever since the purchase in the summer of 1994, Sharp Brave - a company in consumer electronics products - has been consistent in its ability to lose money. Losses over the three years to date were $59.2 million, $14.9 million and $31.69 million. The Leung Kee share and cash purchase of Sharp Brave valued the company's shares about $236.9 million. On Friday the market capitalisation of the group, according to Bloomberg, was $60.7 million. Net current assets have gone from $43.65 million in 1993 to net current liabilities of $5.5 million in 1996. Shareholders' funds have almost halved over the same period from $120.8 million to $63 million. Recession in Europe, fierce price competition and reduced profit margins were behind the losses. In addition, the group managing director Francis Li Chi-hung, says in the recently published annual accounts there was a $12 million exceptional loss in provisions for slow-moving products. The group is caught in a vicious circle of low-end product manufacture, such as the making of calculators, where there is a never-ending race for volume as new entrants slash prices and destroy margins. Sharp Brave could distinguish itself over the 12 months to March 31 by losing money in every major and minor market it operates in, covering Europe, Eastern Europe, North America, Hong Kong and Southeast Asia. Debt due within one year remains relatively high at $55 million, however stocks are down - with most of the $57.4 million figure shown in raw materials. Looking ahead, the group has moved into double-sided printed circuit board production, which it hopes will make a profit and help turn the group around. Construction firm Leung Kee also is doing poorly. The group turned in an unenviable loss of $29.77 million for the 12 months ending March 31. This performance cannot be put solely down to the abysmal time its subsidiary Sharp Brave is having. Leung Kee actually lost $10.8 million in its core business, construction. Property investment did make a profit, however, of $3.3 million. A closer look at the numbers shows a construction operating profit of $11.6 million, before administration and interest payments. The administration bill was $17.85 million and interest payment cost was $17.47 million. Directors at Sharp Brave saw their pay slump, in line with the company's performance. In gross terms the pay bill fell from $5.2 million to $4.47 million. The average pay was $279,000, against $288,000 in the previous year. Leung Kee directors, however, gave themselves a collective pay rise. The gross directors' pay bill rose from $4.48 million to $4.72 million and the average pay per director was $337,000, against $407,000 in the previous year.