Sewco International Holdings has paid dividends to its chairman equivalent to 93 per cent of its net profits between 1998 and 2000 but warned that investors should not use the payout as an indication of future dividends. The main board listing candidate paid Herbert Cheung Po-lun, the sole shareholder, dividends of HK$57.4 million in the three years, on net profit of HK$61.64 million. Two subsidiaries also paid their original shareholders, including Mr Cheung, HK$30 million in dividends in the three months to October 30 last year. 'Prospective investors should note that the rates of payment of dividends may not be repeated and should not be used as reference or bases for the determination of future dividend policy of the group,' the prospectus said. Benjamin Hui Kwok-chu, chief executive of the toy maker, justified the high payout to Mr Cheung by saying it was reasonable compensation for his contribution. He also said the payment would not cause financial stress to the company as it had HK$75 million in cash and retained earnings before the payments. Sewco's net profit grew 131 per cent to HK$25.86 million in 2000 from 1999, as turnover grew 35.6 per cent to HK$338.95 million. In 1999, net profit fell 54.4 per cent to HK$11.19 million while turnover tumbled 17.2 per cent to HK$249.91 million. In the first seven months of last year, net profit amounted to HK$16.95 million on turnover of HK$180.9 million. Sewco has forecast a net profit of at least HK$34 million for last year. Despite heavy reliance on just three customers who accounted for 98.1 per cent of turnover in the first seven months of last year and the fact that the North America market accounted for 81.3 per cent of the total, Mr Cheung said more than 14 years of relationships with the customers would limit the risks of losing them. It has no long-term contracts with the three customers, Bandai, Mattel and The Marketing Store Worldwide (Asia) - a trading agent of McDonald's. Sewco aims to raise net proceeds of HK$36 million by selling 80 million new shares at 55 HK cents each, mainly to fund a new plant. Mr Cheung is to raise HK$11 million by selling 20 million existing shares.