VTech Holdings, Hong Kong-based maker of high-tech learning products for toddlers, saw both net profit and revenue fall in the year to March 31 as the US dollar strengthened and labour costs in China rose.
Net profit fell 8.4 per cent year on year to US$181.4 million. Revenue dropped 1.2 per cent to US$1.86 billion while gross profit margin slid from 32.5 per cent to 31.4 per cent.
Basic earnings per share dropped to 72.2 US cents. The firm proposed only 25 US cents as final dividend, lowering the dividend payout ratio to 58.2 per cent from 98.9 per cent a year earlier, in order to fund the US$72 million acquisition of US-focused toy maker LeapFrog Enterprises in April.
The management blamed the poor showing on the US dollar strength, as sales in Europe – which made up 42.9 per cent of total revenue and fell 2 per cent year on year in US dollar terms – rose in terms of regional currencies.
A data breach due to a cyber attack on VTech’s app store Learning Lodge in November added to the decline in sales and profitability, the firm said in a letter to shareholders.
