Textile company Fountain Set (Holdings) reported profit down 14.4 per cent for the year ended August to HK$186.8 million due to higher operating costs. Turnover was up 9.6 per cent at HK$4.1 billion. Higher operating costs were partly due to the rising price of oil during the year. Operating costs also rose due to the company trying to satisfy the needs of retailers who demanded shorter ordering lead times so they could hold fewer inventories. The company has proposed a final dividend of 3.5 HK cents per share compared with five HK cents last year, from a diluted earnings per share of 24.21 HK cents per share compared with 27.2 HK cents last year. Fountain Set plans to invest HK$250 million in equipment to build steam and electricity co-generation facilities in its manufacturing plants in the mainland over the next two years. The company has HK$204.8 million of bank deposits and cash in hand. In February, Fountain Set signed a five-year loan agreement for HK$480 million and in April undertook a three-year loan agreement for HK$330 million. At the end of August bank borrowings amounted to HK$1.76 billion compared with HK$1.94 billion at the same time last year.