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Carrie Lee

AN enlarged market share has boosted the profit of trading group Li & Fung by 39 per cent to $75.51 million for the six months to June 30.

  Earnings per share rose 12 per cent to 15.1 cents.

  The directors have recommended an interim dividend of 8.2 cents. No interim dividend was declared last year.

  ''Despite adverse conditions in North America and Europe, two of the group's major markets, Li & Fung continued to increase its market share in these regions,'' said managing director William Fung Kwok-lun.

  Turnover grew 28 per cent to $2.06 billion.

  ''We are confident that the group's continuing marketing and investment efforts in North America and Europe will result in a larger market share,'' he said.

  The company warned that trading conditions might worsen in the second half of this year, with continued depressed conditions in many markets and eroded European buying power resulting from currency devaluations.

  But Mr Fung said: ''We remain optimistic that the group can overcome these difficulties and show a good performance in the second half.''   According to estimates in The Estimate Directory, final profit this year will be up 28 per cent at $170.5 million, with earnings per share of 34 cents and a dividend per share of 20 cents.

  The group, one of the territory's oldest and biggest trading houses, trades in mass-produced consumer products from the Far East.

  Li & Fung and Japanese chain store Tomorrowland recently established a joint-venture buying company to supply the Japanese market with fashionable clothing.

  ''In view of the strength of the yen and the import needs of the Japanese market, prospects for this joint venture are favourable,'' said a company statement issued last night.

  The July listing of the group's American associate Cyrk International contributed an exceptional profit of $13.8 million, which will be reflected in the final results.

  Li & Fung retains 24 per cent of Cyrk, which had a market value of $186 million as of August 27.

  In China, the company's investment of $30 million in industrial estates in the Pearl River delta was on schedule, it said.

  ''Despite the recent economic clampdown in China, the group is confident that China will remain the leading export power in Asia,'' said the statement.

  ''Properly managed and operated industrial estates will continue to attract foreign as well as local manufacturers of consumer products who are looking to both the export market and, eventually, the domestic market,'' it said.

  The industrial park will include industrial manufacturing, warehousing and distribution facilities for Hong Kong and overseas business.

  Li & Fung will provide project infrastructure and management and help industrial users set up projects.

  The company has put up for sale plots of land in the first of the three estates.

  The trading house was planning to build a 20-storey commercial block in Guangzhou near the White Swan Hotel, press reports said.

     However, the mainland's austerity plan has made the company's parent Li & Fung (Hong Kong) consider delaying the float of its retail arm, which comprises names such as Toys 'R' Us and Circle K.

  That is because the group sees the maturity of the retail arm's business in China as a pre-requisite for its float.



Li & Fung lifts earnings, market share