Maker of electronic learning products offers larger dividend as profits rise 22pc Telecommunications and electronic learning products manufacturer VTech Holdings expects its United States unit to turn around this year after recording a loss last year due to a lack of market competitiveness. VTech announced better than expected full-year results to March, with net profit rising 22.8 per cent to US$56.9 million, thanks to a one-off gain from the settlement of an indemnification claim. Turnover jumped 11.6 per cent to US$1.02 billion and the company declared a final dividend of 12 US cents, an increase of 71 per cent from a year earlier. However, the company's US telecommunications unit struggled, with sales of its cordless telephones falling 23.6 per cent to US$475 million. This dragged down the whole business unit, which saw turnover fall 10.9 per cent to US$612 million, resulting in a loss and making it the worst-performing section of the group. 'Our products were not accepted by the US market as they were priced higher than competitors last year. Also the product design was outdated,' said chairman Allan Wong Chi-yun. As 46 per cent of group revenue is generated from US telecommunication product sales, VTech has restructured the unit, cutting overheads to bring the costs down. 'We sold all the slow moving and outdated product stocks to a third party and provision has been made,' said Shereen Tong, VTech's chief financial officer. She declined to say how much the firm booked for the provision. Mr Wong said the new product to be launched this year was more competitive, which would help turn around the US unit. He added that a voice-over internet protocol (VoIP) telephone would be the main growth driver for the company in the long term. Meanwhile, its electronic learning product unit recorded strong growth after years of decline. Turnover grew 1.15 times to US$281 million, thanks to a new product - the V.Smile TV Learning System - which has been widely accepted by the US and European markets. Mr Wong said the unit's performance had been beyond his expectations as US sales more than tripled to US$108 million. 'So far this year, we have recorded a good performance in all business units,' Mr Wong said. But he was conscious of the rise in US interest rates, which may affect consumer spending. Moreover, record high oil prices are having an impact on the cost of resin which has more than doubled. Resin counts for about 10 per cent of VTech's materials costs.