Luxury watchmaker and retailer makes record profit of HK$457 million in first half of the year, leaving company chairman in an upbeat mood
Timepiece manufacturer, distributor and retailer Peace Mark said net profit for the first half of the year increased 52.3 per cent to HK$457million. It also revealed an agreement with a syndicate of six banks for a US$200million loan facility on an underwriting basis. The proceeds will refinance existing loans. Peace Mark added that Swiss luxury watchmaker Franck Muller Group had purchased 8.8 million shares, or a 0.7 per cent stake, in the open market.
Did this year's results meet the targets? Yes, the group has made good progress. All business segments recorded growth because of strong organic growth and through acquisitions. Luxury retail business sales surged 182.7 per cent to HK$1.23billion under the expansion and the flourishing market of imported watches in China. Our mid-range retail business achieved sales growth of 38 per cent to HK$1.53billion.
Are there any surprises in their results? The results are record breaking. Net profit was a record HK$457million, an increase of 52.3 per cent compared to last year; whereas total turnover grew by 37.4 per cent to HK$4.17 billion.
What are you doing with the dividends? We intend to preserve cash for working capital requirements. We wish to maintain our dividend payout ratio at a level between 30 per cent and 35 per cent.
Are there any notable changes in the industry in 2008? Any key challenges?
The luxury markets, especially in China, continue to flourish and are favourable. The group's total number of luxury retail outlets increased by 43 to 108 stores, and their sales revenue surged as well. The popularity of luxury watch brands is also growing. The group opened shops for Rolex, Omega, Blancpain, Glashutte, Longines, Rado and Tissot.
