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SCMP Reporter

AN exceptional gain from a property sale has saved Leefung-Asco Printers Holdings from sinking into the red for the year ended March.

  The printing company posted a net profit of $223.17 million, 3.7 times higher than a year ago, while turnover dropped 19 per cent to $224.80 million.

    The profit includes an exceptional gain of $348.51 million, which more than compensated for the company's operating loss for the year.

    The operating loss amounted to $13.50 million during the period, compared with an operating profit of $18.44 million a year ago.

  Earnings per share were 77.4 cents compared with last year's 17.9 cents.

  Directors proposed a final dividend of 2.5 cents and a special dividend of 10 cents, bringing the year's payout to 15 cents a share.

  Leefung-Asco sold its 70 per cent interest in an industrial property in Lai Chi Kok to Ryoden Development in March, making an exceptional gain of about $262.4 million.

   Leefung-Asco said its profitability was affected by a drop in sales volumes and tight profit margins.

    The printing business, which accounted for 98 per cent of the company's turnover, was battered by the economic slowdown in its two biggest markets: Europe and the United States.

    The company said the weakness of European currencies, notably the Italian lira and Spanish peseta, affected its competitiveness against American and European publishers, who took advantage of lower currency conversion rates.

    In addition, many publishers, suffering from low consumer spending, cut back inventories and placed smaller orders with printers closer to their home markets.

      Meanwhile, Leefung-Asco said its financial printing section reported a loss, because of high start-up costs, keen competition and a slowdown in the territory's financial sector.

    But it hoped the section would capitalise on the rebound of financial activity in the territory and, increasingly, China.

   Regarding new business, Leefung-Asco said it had signed an agreement with a US entertainment conglomerate to publish Flintstones' comic books, which would be distributed in Hong Kong, China and Taiwan.

    ''Negotiations with the licence holders of other popular cartoon characters are under way,'' it said.

    As a result of a steady exodus of Hong Kong manufacturers to China, Leefung-Asco said such relocations created a pent-up demand for packaging materials and expertise on the mainland.

    In a bid to cash in on demand, the company has taken a 60 per cent stake in a joint venture in Shenzhen to produce cardboard and corrugated packaging materials.

    The company also said it would specialise in the production of ''pop up'' children's books, which was a growing business.



Printer's property sale staves off losses