JOYCE Boutique has turned around a hefty plunge in interim earnings to record an increase in after-tax profits of 3.92 per cent to $34.03 million for the year to March 31, ahead of market expectations. The company attributed the turnaround in the second half to The Galleria coming on line and loyal customers continuing to snap up pricey designer labels, as well as cost-cutting measures. Analysts were broadly looking for an overall dip in profits for the year. The consensus forecast cited by The Estimate Directory was for a 12 per cent drop in profits on the previous year to $29 million. Earnings per share were up five cents to $13.1 and the group plans to pay out a dividend of 4.5 cents a share, down 41.56 per cent on the 7.7-cent payout last year. Managing director Roberto Dominici said: ''In sharp contrast to a decline in first-half profits, the group's retail operations posted significantly improved results in the second half of the year. ''These improved results generally reflect the vigour of Hongkong's high-fashion and lifestyle retail environment. ''Joyce's own strengths have become more evident against a background of recession in major overseas markets, political divisiveness at home and the rapid pace of economic and social changes throughout China.'' At the half-way stage Joyce had a net profit plunge of 37.18 per cent to $10.2 million, while turnover rose 20 per cent to $263.18 million. Excessive inventory and low sales margins took much of the blame. For the full year, turnover rose 24 per cent to $555.52 million, partially fuelled by contributions from the 16,000 sq ft World of Joyce boutique which opened in March 1992. Yesterday the share price closed down one cent at 72 cents, two cents lower than the price on the day that the more disappointing interim results were unveiled. As well as a programme of cost-cutting - which helped operating profits improve 13.6 per cent to $41.03 million for the year - the group has closed boutiques failing to turn in respectable profits. In the past 13 months five specialist shops have bitten the dust: Joyce Men in the Mandarin, Inscription Rykiel in the Landmark, Sonia Rykiel in the Peninsula, Genny, also in the Peninsula, and Issey Miyake in Swire House. Last week Lane Crawford reported a 26 per cent rise in after-tax profits to $155 million, broadly on the back of increased turnover and tighter cost-control as it too axed non-performing boutiques. Next month Joyce will open Joyce Intimate in the Landmark, and in September two big projects come on line - the first American designer outlet in China and a 38,000 sq ft World of Joyce, complete with restaurants and flower stall, in Taipei. The Donna Karan boutique in Shenzhen is to be housed in the new Seibu store. Group chairman Walter Ma said: ''The group moved forward with two strategic commitments: to build on our most successful franchises in Hongkong and to expand regionally.'' Mr Dominici said the group reorganisation, which kicked off in financial year 1990-91, has translated into tighter financial controls, stricter accountability, more accurate buying and enhanced staff productivity.