Handbag-maker Lee and Man Holdings, which starts its $206.25 million share sale today, has suffered declining profits in the past three years while at the same time increasing dividend payments. Net profit for the year to March 1994 was $107.28 million, falling to $98.17 million in 1995 and $97.12 million last year. The full-year dividend payout has increased since 1994, when it distributed $43.47 million, compared with $95.25 million in 1995 and $96.93 million last year. No dividend will be announced this year, according to the company's listing prospectus. Co-founder and director Wai Siu-kee said yesterday the company's decision to slash product prices in 1995 had squeezed net profit margins. Lee and Man forecast this year's net profit to grow at least 13 per cent to $110 million. Chairman Lee Wan-keung said he intended to inject his privately owned paper-making factory into Lee and Man when it started to generate profits.