Esprit Holdings chairman Michael Ying Lee-yuen is stepping down from his post, the global fashion wholesale and retailing chain disclosed yesterday, as it released improved full-year net profit growth of 16.4 per cent. In an unexpected announcement, the company said that at the end of the year, chief executive Heinz Krogner will succeed Mr Ying while retaining his current post. Mr Ying will then become a non-executive director. For the year to June, the blue chip's net income reached HK$3.74 billion, up from HK$3.21 billion posted a year ago, on turnover rising 13.2 per cent to HK$23.35 billion. The net figure was in line with a mean consensus forecast of HK$3.76 billion from 18 analysts polled by Reuters. The company proposed a final dividend of 73 HK cents per share and a special dividend of HK$1.08 per share, representing a full-year dividend payout ratio of 75 per cent. The company, which had struggled with poor merchandising last year, said sales had regained momentum in the second half as shown by its 9 per cent full-year same store sales increase. Esprit only recorded a comparable sales growth of 5 per cent in the first half due to disappointing buyer response to its women's casual and collection lines, affected by the failing health of two managers and the edginess of some of its clothing. Germany, which contributed 47.7 per cent of Esprit's revenue, will remain the company's growth driver, according to deputy chairman and group chief financial officer John Poon Cho-ming, dismissing concern from some analysts about an increase in value-added taxes there from 16 per cent to 19 per cent next year cutting into profit margins. 'The VAT increase will have very little impact to our profitability,' said Mr Poon, maintaining that the pressure on margins due to the tax increase would be eased by higher sales volume. Sales in Germany, in which the company estimated it had 3 per cent of the fashion market, grew 11.8 per cent during the reporting year. Other parts of Europe accounted for 37 per cent of Esprit's turnover, while Asia-Pacific contributed 12.4 per cent and North America 2.4 per cent. Esprit's retail revenue, which accounted for 41 per cent of the total, rose 13.5 per cent, as the company boosted retail outlets by 37 to 668 as of the end of the financial year. Wholesale turnover, accounting for 58 per cent of the total, rose 13.1 per cent. Earnings before interest and tax (ebit) margin for wholesale was 28.1 per cent, up 1.9 percentage points from a year ago, while ebit margin for its retail segment fell 0.1 percentage point to 12.3 per cent. The company had an HK$80 million net profit from its China joint venture with China Resources in which it owns 49 per cent. Esprit shares yesterday rose 2.18 per cent to close at HK$65.55 before the results were released.