Singapore Corporate News - 6 Feb 2008

SingPost may sell landmark Paya Lebar HQ

Singapore Post's landmark headquarters next to Paya Lebar MRT station may be on the verge of unlocking some riches.

SingPost said it is 'exploring opportunities' for Singapore Post Centre, which has about one million sq ft of net lettable area. Valued at $1,000 to $1,300 per square foot of existing net lettable area, this could translate to a total of $1 billion to $1.3 billion, assuming a full-commercial use, analysts estimate. The 14-storey building is on a 352,389 sq ft site with a remaining lease of about 73 years.

In its third quarter results statement last month SingPost said that it is 'continuing to review its non- core businesses, and is also exploring opportunities in respect of SingPost Centre, including unlocking the value of SingPost Centre'.

When contacted for details, SingPost's spokeswoman would only say that the group was at the 'preliminary stage of exploring opportunities in respect of SingPost Centre' and declined to elaborate.

But industry observers say SingPost held a 'beauty parade' late last year to select a property consultant to advise it on exploring its options for the property. The exercise is believed to have culminated in an appointment being made.

Market watchers say that among the factors that will determine the price that any potential buyer will be prepared to pay for SingPost Centre is whether SingPost will lease back the space it currently occupies in the building and the rental it is prepared to pay.

SingPost currently occupies about half of the property's one million sq ft total net lettable area for both its corporate office and operations including the mail processing centre.

The rest of the property is leased to a mix of office and retail tenants including HSBC Insurance, NorthWest Airlines, Symantec Corporation, Prudential (whose lease expires this year), This Fashion, Barang Barang, NTUC FairPrice and Kopitiam.

Although the site is zoned for commercial use with a 4.2 plot ratio (ratio of maximum potential gross floor area to land area) under Master Plan 2003, the current approved use for the site is understood to be 60 per cent industrial and 40 per cent commercial.

SingPost will probably be advised to make an application to convert the approved use to full commercial, to optimise the site's use under the current Master Plan. This would also be in keeping with the government's intention, announced last year, to transform the area around Paya Lebar MRT Station into a new business hub.

Some property consultants have since commented that the location will be ideal for cost-conscious office tenants, and could serve as backroom offices for banks, given its proximity to the city.

In exchange for allowing a conversion of the site's approved use a differential premium will have to be paid to the state.

SingPost Centre's existing gross floor area of 1.48 million sq ft has already tapped the 4.2 maximum plot ratio allowed under Master Plan 2003.

Property analysts reckon that office and retail space on the SingPost Centre site could be worth around $1,000 to $1,300 psf of net lettable area, with the higher end of this range ascribed to retail space.

SingPost Centre was completed in two phases - the industrial component in July 1998 and the commercial space in May 1999.

The 14-storey building, which also has three basement levels (mostly for retail), has a total of 587 car park lots.

SingPost has been selling some of its smaller properties. For the financial year ended March 31, 2007, it divested two HDB shop units - one at Marine Parade sold for $5.7 million, and the other at Hougang South divested for $2.2 million. The Marine Parade property was the group's former post office branch; SingPost has since relocated to a nearby leased property. The Hougang property was not used as a post office but was instead leased to a supermarket operator.

In the current financial year, the group has divested its former post office branch at Clementi Central and relocated its operations to another location nearby and sold a property at Boon Lay, which it had leased to a third party.

Several years ago, there had been market speculation that SingPost could spin off its post office properties into a real estate investment trust (and lease back the premises from the Reit). But that does not seem to be the way SingPost is headed currently in optimising its property portfolio. The group is still left with over a dozen properties, including two in the prime districts - Tanglin Post Office and Killiney Road Post Office.

Associates chip in to lift SingTel's Q3 showing

Singapore Telecommunications yesterday posted a net profit of $952 million for its third quarter ended Dec 31, 2007, down 4.2 per cent on exceptional items which included the sale of a property in the year ago period.

What was impressive was the juggernaut's 22 per cent stronger than expected gain in underlying net profit - which excludes exceptionals, exceptional currency translation gains and IDA compensation - to $931 million. This came on the heels of a strong domestic performance as well as sparkling contributions from its regional associates.

Telkomsel, Indonesia's biggest mobile-phone operators which is 35 per cent owned by SingTel, contributed $223 million to its earnings. The contribution from Bharti Airtel, India's biggest telephone company, climbed 50 per cent to $193 million.

Shareholders sent the stock four cents higher to close at $3.90 amid an overall depressed market. The Straits Times Index ended 38.66 points lower to 3,038.42.

SingTel's third quarter results were better than the estimates of five analysts - Citigroup, DBS, Deutsche Bank, Macquarie Securities and Morgan Stanley.

For the nine months, net profit was up 2.8 per cent to $2.87 billion while underlying net profit rose a faster 16.3 per cent to $2.71 billion.

A delighted chief executive Chua Sock Koong said: 'The group continued its impressive growth momentum and delivered its third consecutive quarter of double-digit revenue growth.

'In Singapore, our focus on winning and leading share in growth segments like mobile and data and Internet helped us achieve our third straight quarter of double-digit growth in this highly competitive market. Optus delivered a robust performance in the very competitive Australian market,' she said.

SingTel's regional mobile associates also shone, posting good profit and dividend growth.

Group revenue rose 11 per cent to $3.83 billion for the period under review, driven by an 11 per cent expansion in the Singapore market and the appreciation of the Australian dollar.

The stronger Australian dollar lifted operating revenue and net profit by $183 million and $13 million respectively.

At home, SingTel continued to add more mobile phone customers at a faster rate than its smaller rivals StarHub and MobileOne.

The giant telco was particularly successful in cementing its leadership in the foreign worker segment.

Operational earnings before interest, tax, depreciation and amortisation (Ebitda) increased 6.1 per cent to $482 million while its margin declined 1.8 percentage points to 38.7 per cent. The lower margins reflected the higher selling expenses associated with aggressive mobile customer acquisition, costs incurred for key strategic initiatives and the higher proportion of low-margin equipment sales.

Revenue from the mobile phone business grew an impressive 18 per cent year-on-year to $345 million. Continuing the strong momentum, SingTel further increased its lead in the mobile market with 2.33 million customers. It added a record 197,000 mobile customers in the quarter and enlarged its overall market share by 0.9 percentage point to 41.2 per cent as at Nov 30, 2007.

Operational Ebitda at Australian unit Optus was up 8.6 per cent to $654 million on an 11.5 per cent rise in revenues to $2.6 billion.

Associates' post-tax profit rose 34 per cent to $492 million and contributed 53 per cent to SingTel's underlying net profit.

Cash dividends for the quarter received from associates was $437 million, bringing the total received for the nine months to $1.02 billion, up 74 per cent from a year ago.

Free cash flow for the quarter more than doubled to $962 million and for the nine months was $2.65 billion, up 41.2 per cent. SingTel owes a net $7.1 billion and the average maturity of its debt is five years.

St James set to be first Catalist listing

THERE are anxious times ahead for the next few months at Singapore's largest night-spot, St James Power Station, as its parent plans to become the first company to list on the new sponsor-supervised board, Catalist.

St James Pte Ltd, the operator of the venue, plans to come to market through a $108 million reverse takeover of listed information technology company JK Technology Group.

JK Tech announced yesterday that it had secured PrimePartners Corporate Finance as its sponsor in connection with its complete transition to Catalist.

While most of the 160 companies formerly listed on Sesdaq have migrated to Catalist, they continue to operate under the old Sesdaq rules. They have been given two years to conform to the new rules, including finding a sponsor.

The new Catalist board, similar to London's Alternative Investment Market (AIM) for small, fast-growing firms, does not require companies to meet any prescribed financial entry criteria to be listed.

According to a St James press release, the effective date of the transition will be no less than a month from yesterday. The company said the move will pave the way for JK Tech to convene an extraordinary general meeting of shareholders to approve the takeover, which will result in the IT company issuing just over 615 million new shares valued at 17.55 cents each, in three tranches, for the entire assets of St James.

The current shareholders of St James - fashion retailer FJ Benjamin; Metro Holdings boss Jopie Ong's private investment vehicle EK Capital; Dennis Foo's Dennon Entertainment; and Breadtalk Group - will then end up owning about 83 per cent of JK Tech while its current major shareholders, including founder Eugene Ang who now owns 54.8 per cent of the company, will have a 15 per cent stake.

As Catalist rules require a 15 per cent free float, St James Holdings will have to place out at least 13 per cent of its shares worth about $12 million. The reverse takeover is targeted for completion by the second half of this year after which JK Tech will be renamed The St James Holdings.

Dennis Foo, chief executive of St James, which boasts a 70,000 sq ft complex with nine distinct entertainment outlets, said: 'We are very excited with our plans to go public. The Catalist listing gives us a quick access to the capital market and puts us in a strong position to expand our business in size and scope, both locally and abroad.'

He told BT that the group is currently negotiating for space with the developers of the two forthcoming integrated resorts. 'Singapore's entertainment scene has not been fully exploited, and there are opportunities for us to make some new acquisitions and bring new concepts here. In two or three years when we think we have fully covered the scene here then we plan to seek opportunities abroad.'

CMT's Jurong mall to get new ice-skating rink

CAPITAMALL TRUST (CMT) will replace the existing Fuji Ice Palace ice-skating rink at its Jurong Entertainment Centre (JEC) with a new Olympic-size rink - the first in Singapore.

Costing about $7-8 million, the new facility will be 30 by 60 metres, larger than the current rink which is 20 by 40 metres.

The new rink is part of $138.2 million of asset enhancement works proposed at JEC. All the works are slated for completion by Q4 2009. They are expected to increase net property income by $12.4 million per year, reflecting an ungeared return on investment of 9 per cent.

The Urban Redevelopment Authority (URA) last year granted CMT outline planning permission to raise JEC's plot ratio from 1.85 to 3.0 for full commercial development. The approval effectively boosts JEC's gross floor area (GFA) by over 62 per cent, from about 170,000 sq ft to 275,500 sq ft, and the net lettable area by over 89 per cent, from around 111,000 sq ft to 209,700 sq ft. A differential premium at $1,200 per square metre of additional GFA, payable to URA, has already been locked in.

Asset enhancement at JEC will comprise several initiatives. The six-screen cineplex on level 1 will be relocated to level 5, a newly created floor.

The current ice-skating rink on the third level will make way for the new facility, whose operator has yet to be finalised. A rooftop landscaped garden will be built on level 6.

Trust manager CapitaMall Trust Management Ltd (CMTML) said it expects the new skating rink will be flanked by food and beverage operators or restaurants on both sides, creating a unique dining experience.

The rink will not only give Singapore's national skaters a place to train for International Skating Union-sanctioned events such as the Olympics and the World Championships, but will also be a crowd puller with students and budding athletes yearning to excel in the sport, CMTML said.

SembCorp Gas launches GPlus

SEMBCORP Gas is launching its new CNG retail service on mainland Singapore - under the 'GPlus' brand name - with a big bang on Chinese New Year, Feb 7, by offering a hefty 19 per cent hong bao discount on current compressed natural gas prices.

The offer - valid from Feb 7-29 - means motorists with cars that can use CNG will enjoy a discounted price of 90 cents per kg net versus the current CNG retail price of $1.11/kg.

Compared with normal petrol and diesel, SembCorp's GPlus offer works out to be a 53-per-cent savings over petrol at $1.91 per litre and a 37-per-cent savings over diesel costing $1.44 per litre.

SembCorp's GPlus outlet at Singapore Petroleum Company's Jalan Buroh station is its second CNG outlet; its first CNG refuelling station is on Jurong Island. It said that the hong bao discount is available at both stations.

SembCorp earlier said it is aiming to open at least three to four more CNG stations - including at Bedok and Bukit Merah - in the next 12 months.

Under an agreement between SembCorp Gas and SPC last November, GPlus will be retailed directly by SembCorp Gas. The GPlus CNG outlet, which is connected to SembCorp Gas' underground pipelines, is owned and operated by SembCorp Gas.

Currently, there are about 500 CNG cars in Singapore, and the number is expected to grow with increasing environmental awareness and demand for cheaper motoring - especially with ever-escalating petrol and diesel pump prices.

SembCorp Gas' director Francis Gomez said: 'GPlus stands for greener driving and benefits for both motorists and the environment.'

'SembCorp is committed to further widening our retail service for GPlus, and customers can expect more GPlus outlets in Bedok and Bukit Merah before the end of the year,' he added.

Another CNG player, Smart Energy - an affiliate of cab operator Smart Taxis - broke ground last September for a CNG station in Mandai Link which is scheduled for completion any time now.

Smart operates a fleet of 770 cabs, of which 110 can run on CNG, and expects to buy at least 300 more cabs to be retrofitted to run on CNG.

Keppel Gas wins $3b ExxonMobil deal

KEPPEL Gas has clinched a S$3 billion-plus, long-term deal to supply Malaysian natural gas to ExxonMobil's (EM) existing refinery and petrochemical complex on Jurong Island, as well as to a second petrochemical complex the oil giant is now building.

EM intends to use the gas to fuel cogeneration plants which can supply all its electricity needs, as well as steam supplies for its operations.

Keppel Gas' gas supplies, which will start in 2009, will initially be used to feed EM's existing 150-megawatt cogeneration plant at its first petrochemical complex, as well as for heating purposes at its 605,000 barrels per day Singapore refinery, EM spokeswoman Eva Ho told BT.

It will supplement current Indonesian gas supplies which EM is getting from SembCorp Gas.

The additional Malaysian gas from Keppel Gas, a subsidiary of Keppel Energy, will later also be used to fuel a second 220 MW cogen plant which EM is building for its second petrochemical complex, she added. Keppel Energy is wholly owned by Keppel Corp.

The second complex - reportedly costing over US$5 billion - will be operational in 2011.

The world's largest oil company is a proponent of cogeneration because it sees it as a significant factor in reducing energy consumption and improving energy efficiency at its facilities worldwide.

Ong Tiong Guan, Keppel Energy's managing director, said: 'We are pleased to be supplying gas to ExxonMobil and to build a long-term business relationship with the world's largest publicly traded oil and gas company.

'We look forward to supporting our customer's expansion in Singapore that will also benefit our country's development as a premier chemical industry hub.'

Keppel's Malaysian gas comes from a S$3 billion-plus deal it signed with Malaysia's Petronas in July 2005, in which it contracted to import 115 million standard cubic feet of gas daily for 18 years, starting from mid-2006.

Part of the gas was meant to fuel Keppel Energy's own 500-MW cogen plant, with KepCorp also planning in the longer term to import additional gas supplies for petrochemical customers on Jurong Island.

But because of some pipeline use snags here - albeit recently settled - which earlier prevented it from bringing in its Malaysian gas for its own cogen station, Keppel Energy itself had to resort to buying Indonesian gas from importer Gas Supply Pte Ltd as an interim measure.

Even with the inflow of its Malaysian gas supplies now, it is understood that Keppel Energy will continue to use the contracted Indonesian gas to help fuel its own cogen plant. The sale of some of the Malaysian gas to EM will, therefore, help account for its contracted supplies from Petronas.

Jaya Holdings' Q2 net up 46% to $32m

BUOYANT oil and gas sector demand sent Jaya Holdings' net profit up 46 per cent to $32 million for its second quarter ended Dec 31, 2007.

The year-on-year surge in earnings was despite revenue rising just 2 per cent to $74.4 million. Gross profit margin rose from 30.2 per cent to 38.2 per cent.

Jaya's offshore shipping division was the group's star performer, contributing a net profit of $15.6 million - a 19 per cent gain over the previous corresponding quarter.

This was despite a 60 per cent drop in gains from vessel disposal to $4 million. What helped was a bigger chartering fleet of 30 vessels and a rise in utilisation rate from 80 per cent to 85 per cent.

The shipbuilding division more than doubled net profit to $15.2 million from $7.1 million as higher progressive recognition of vessel sales kicked in. For the quarter, it recognised revenues from two completed vessels and another seven under construction at a blended average completion rate of 32 per cent.

For the first half year to Dec 31, net profit rose 37 per cent to $74.2 million. Revenue, however, fell 30 per cent to $130.9 million.

First-half gross profit fell 20 per cent to $49.1 million. What helped in the first half were higher vessel disposal gains. Jaya recorded a gain of $33.4 million from the sale of four vessels against a gain of $12.9 million from the sale of five vessels in the previous corresponding period. The mix of larger vessels disposed of resulted in the relatively higher disposal gains.

Jaya's share of profits from associates also rose to $1.96 million in the first six months, from just $234,000 for the previous corresponding period.

'Our strategic move to cater to the booming oil and gas sector is bearing fruit as our well-equipped and custom-made vessels have been able to fetch good sale prices and profit margins,' said chief executive Chan Mun Lye.

'We currently have 70 vessels, largely Anchor Handling Tug Supply vessels, under construction with an estimated current market value of over $2.1 billion,' he added. 'And we have to date committed 28 of these for either chartering or sale and will progressively take on more commitments as we ride the upside.'

Second-quarter earnings per share rose from 2.87 cents to 4.15 cents. Jaya will be giving out an interim dividend of 5.5 cents per share.

SFI's profit in Q4 slips 0.1% to $11.78m

SINGAPORE Food Industries (SFI) said yesterday its fourth-quarter net profit fell 0.1 per cent to $11.78 million despite a 12.6 per cent jump in turnover to $221.48 million.

Cost of sales rose 13 per cent to $161.02 million while operating and administrative expenses climbed 10.5 per cent to $40.53 million on higher marketing and distribution costs. Profit was also hit by a $2.6 million charge on fair value recognition of financial guarantees given for bank borrowings by China subsidiary Shanghai STFI, a frozen convenience food maker. Earnings per share for the quarter were down 0.3 per cent to 2.3 cents.

For the 12 months to Dec 31, SFI posted a 3.9 per cent rise in net profit to $31.37 million, reversing a 16.3 per cent drop the previous year. Full-year earnings per share came in at 6.1 cents, up 3.3 per cent from 5.9 cents. SFI is recommending a final tax-exempt one-tier dividend of 3.2 cents a share. Together with an interim net dividend of 1.8 cents paid last month, total net dividend for 2007 will hit five cents a share or $25.8 million.

In Singapore, food distribution sales were up 8.6 per cent to $138 million, led by growth in chilled pork sales. SFI's catering arm, which supplies meals to the armed forces and hospitals, saw sales up 6.8 per cent on higher consumption and a price increase with a key customer.

In its UK and Europe operations, sales rose 14.4 per cent to $423.3 million. But Irish subsidiary Cresset, a ready meals maker, incurred a loss of $7.3 million. The region now accounts for 59.2 per cent of SFI's turnover but profits were hit by a sharp rise in raw material costs last year. The company said it will continue to review the operations of Cresset in 2008 and that 'the business still needs to increase sales significantly to a viable level to operate profitably'. SFI also said it is reviewing strategies to exit Shanghai STFI in China.

SFI chief executive Roger Yeo said: 'Singapore operations had a very strong second half in 2007, and this has provided strong momentum for us going into 2008. Subject to the renewal of the key contract in the catering division (end of Q1 2008), we expect FY2008 to be better than FY2007.'

Tuan Sing's earnings up 92% for '07

PROPERTY group Tuan Sing Holdings yesterday announced an almost doubling of full-year earnings, thanks to the strong Singapore property market, contributions from its Australian hotels and fair value gains from investment properties.

The company chalked up full-year attributable earnings of $151.1 million for the year ended Dec 31, 2007, a 92 per cent leap from 2006's $78.7 million.

This was despite the previous year's earnings being boosted by a deconsolidation gain of $37.5 million after Gul Technologies Singapore Ltd became an associate.

Topline revenue dipped 12 per cent to $322.1 million due to a fall in turnover on its industrial services division, SP Corp. However, its property and hospitality turnover hit new highs.

Property generated revenue of $49.8 million against $17.8 million a year ago, thanks to the strong property sales and higher rental income from the group's investment properties. The segment recorded a profit after tax of $97.8 million, compared to $38.4 million in 2006, much of it from a net gain on the fair valuation of investment properties of $84.6 million in 2007 (compared with $39.6 million in FY2006).

Tuan Sing's property division's profit contributed about 64 per cent of the group's total profit for 2007.

Its Australia-based Grand Hotel Group (GHG) chalked up a profit of $74.8 million, including the group's share of the fair value gain on GHG's assets portfolio. After deducting takeover charges, investment costs and provision for deferred tax, Tuan Sing's investment in GHG generated a net profit of $51.0 million, representing about 34 per cent of the group's total profit for the year.

Tuan Sing's retail business, centred around TS Planet Sports Pte Ltd, which owns 60 per cent of golf products distributor Pan-West, recorded a 17 per cent rise in revenue to $63.4 million and a net profit of $1.4 million.

Looking forward, Tuan Sing said the strong FY2007 performance and improved balance sheets would enable it to further broaden its earning bases and position itself to continue with its pursuit to improve future growth and profitability. But it warned of greater uncertainty arising from the US sub-prime woes and the slowdown of the US economy.

Meanwhile, the group is said to be seeking suitable partners to redevelop its prime commercial property centred around Robinson Towers and two adjoining buildings in the Robinson Road-Maxwell Street area.

Together, this 'island' of three properties has a total built-up plot ratio of 10 times, comprising a total floor area of some 12,500 sq m, or some 134,000 sq ft. Tuan Sing's valuation of these properties, done two years ago, was $154 million.

Property insiders reckon that this cluster could be worth well over $300 million in current market conditions.

The latest record high profits boosted its earnings per share to 13.3 cents, from 6.9 cents, while net asset backing per share rose to 38.4 cents from 22.5 cents a year ago.

Annualised return on equity improved to 44 per cent from 36 per cent in FY2006.

Aztech's Q4 profit down 28.7% to $5.56m

THE weakening US dollar and rising labour costs in China have dragged down Aztech Systems' fourth-quarter profit 28.7 per cent to $5.56 million.

Although sales jumped 9.5 per cent from a year earlier to $83.18 million, the bottomline was hit by the appreciation of the yuan and the Singapore dollar against the greenback, as well as the introduction of labour restrictions in China that propped up staff costs, Aztech chairman and CEO Michael Mun explained. Q4 earnings per share dropped 26.7 per cent to 1.4 cents.

The company, which makes networking products such as ADSL (Asymmetric Digital Subscriber Line) modems and gadgets such as Internet phones and MP3 players, has its manufacturing base in Dongguan, China, and its headquarters in Singapore.

Mr Mun said OEM (original equipment manufacturing) and ODM (original design manufacturing) business continued to be the main revenue driver in Q4, accounting for 51 per cent of overall sales. This unit makes voice and networking equipment for Internet service providers and telcos. Aztech's two other business units - contract manufacturing and retail - accounted for 38 per cent and 11 per cent of total revenue respectively.

For the year ended Dec 31, Aztech reported net income of $18.18 million, down 9.3 per cent from $20.04 million a year earlier. Full-year sales totalled $268.31 million, up 12.3 per cent from $239 million in 2006. Aztech is proposing a final dividend of one cent per share. This comes on top of an interim dividend of 0.75 cents paid in August last year.

Informatics posts profit after 4 years

INFORMATICS Education has finally smelt profit. For the first time in 17 quarters, it reported a net profit of $31,000 for its third quarter ended Dec 31, 2007. This compares with a net loss of $643,000 for the previous corresponding quarter. The group slashed its Q3 loss from operations to $139,000 from $725,000 and found itself in the black because of an interest income of $189,000, up from $124,000. It also managed to cut its nine-month net loss to $3.65 million from $4.67 million. Its shares closed at 5.5 cents each yesterday.

Aussino interim earnings down 55%

AUSSINO recorded a 55 per cent year-on-year fall in net profit to $2.36 million for the half-year ended Dec 31, 2007. Revenue dropped 6 per cent to $53.6 million. According to the company, the lower sales and net profit were mainly due to the decrease in sales in some of its key markets such as China and the US.

HupSteel Q2 profit up 19% to $8.2m

HUPSTEEL reported a net profit of $8.26 million, up 19 per cent from $6.96 million one year ago, for the fiscal second quarter ended Dec 31, 2007. For the half-year, it recorded a net profit of $15.6 million, up 6 per cent from the $14.7 million recorded one year ago. Turnover during Q2 was $100 million, up 54 per cent from $65.1 million a year ago. For the half- year, turnover was $171.7 million, up 43 per cent from $120.4 million.

SNP Corp reports record earnings

SNP Corp has announced a record net profit of $29.3 million for 2007, a 39 per cent increase. The growth in profit came on the back of improvements in all of SNP's business segments, in particular its commercial printing operations. For FY2007, turnover of the group's continuing operations grew by 16 per cent to $517.3 million.

Time Watch H1 earnings soar 49%

TIME Watch Investments, one of China's leading watch retailers, reported a 48.7 per cent year-on-year jump in net profit to HK$31.29 million (S$5.7 million) for its fiscal half ended Dec 31, thanks to strong sales of watches for its proprietary Tian Wang and Balco brands in China. While its revenue declined 1.8 per cent to HK$438.29 million from a year ago, stronger contributions from its higher margin segments lifted its bottomline. The company is now looking to expand its core business and will continue opening retail stores at strategic locations to maximise returns.