Johnson Electric Holdings, the only industrial company in the Hang Seng Index, yesterday reported a better-than-expected 58.9 per cent rise in attributable profit to $437 million for the year to March 31. The company, which manufactures micromotors, mainly for use in cars and power tools, said the strong growth was due to the implementation of cost-cutting measures and lower prices for raw materials. Chairman and chief executive Patrick Wang said: 'Our programmes to produce more components in-house and to identify new sources for raw material have had an impact on profitability.' He said the growth in sales was helped by the heavy investment in capacity expansion taken over several years. 'Our expectations for growth in demand have proved to be realistic across all of our major markets,' he said. Earnings per share climbed 58.7 per cent to $1.146, and turnover rose 18.2 per cent to $2.6 billion. The directors recommended a final dividend of 19 cents per share, up from 17 cents, making a total dividend for the year of 27 cents, up from 25 cents. In addition, the board recommended a bonus issue of one share for every five shares held. The results were above most forecasts. The consensus among 28 analysts covering the company had been for attributable profit to rise just 44 per cent to $396 million, according to The Estimate Directory. BZW Asia investment analyst Vijay Harjani said: 'After three years of flat growth, the growth this year was phenomenal. There is good news across the board.' Mr Harjani said the improvement in Johnson's operating profit margin - from 13 per cent in financial year 1996 to 18 per cent in 1997 - was helped by higher utilisation of its production capacity. He said this was enabled by strong demand for micromotors from the car and power tool industries. Investors responded positively to the results. Johnson Electric shares surged 6.19 per cent yesterday, or $1.40 to $24.