Solid financial strength with HK$402 mn net cash, Bossini (Hong Kong)

Bossini International Holdings Limited announced its annual results for the year ended 30 June 2010.

Year 2009/10 can be described as quite a rewarding year for Bossini. The Group triumphed over the challenges it faced in the aftermath of the global financial crisis and achieved encouraging results. Revenue for the year under review rose by 2% to HK$2,306 million (2009: HK$2,254 million). Gross profit was HK$1,190 million (2009: HK$1,113 million), representing a gross margin of 52% (2009: 49%), an increment of 3% points from previous fiscal year.

Profit attributable to owners recorded an impressive boost by 80% to approximately HK$90 million (2009: HK$50 million) while basic earnings per share rose to HK5.66 cents (2009: HK3.16 cents). The Board of Directors recommended the payment of a final dividend of HK2.3 cents per share and a special dividend of HK0.3 cent per share for the year ended 30 June 2010; together with the interim dividend of HK1.1 cents per share; the total dividend for the year amounted to HK3.7 cents per share. Total dividend payout ratio for the year was 65%.

The Group was in a healthy financial position during the year under review. Net cash balance amounted to HK$402 million (2009: HK$265 million) at 30 June 2010, representing a remarkable upsurge of HK$137 million from the previous year.

Ms. Bess Tsin Man Kuen, Chairman of Bossini, said, "The first year in my position as the Chairman of Bossini was full of challenge, opportunity and growth. We operated in a complex and ever-changing environment which to a very great extend challenged the management's capabilities in steering the Group in the right direction, managing our business effectively and efficiently, and responding to market changes swiftly and decisively.

Our strategies focused on business expansion in the mainland China market, enhancing the "be happy" brand image and optimising internal operations. We believe these strategies have produced a strong foundation that will enable us to further bolster the profitability and growth of the group in a sustainable manner.

Despite the competitive operating environment and uncertain regional consumer demand in 2009/10, the Group's overall same-store sales recorded an encouraging 5% growth (2009: 3% decline). Notably, the Hong Kong market achieved a remarkable 11% (2009: 2% decline) same-store sales growth. This is attributable to strong brand awareness, strong retail sales growth in Hong Kong market, and the growing recognition of our brand value - "be happy". The mainland China market experienced a slight slump, posting a 1% same-store sales decline (2009: 5% growth), while other markets such as Taiwan, Singapore and Malaysia recorded same-store sales declines of 4%, 1% and 12% (2009: 12% decline, 8% decline and 1% growth) respectively.

Bossini has grown since its beginnings in 1987 into an apparel enterprise with 1,361 stores in 33 markets. The Group continued to capitalise the opportunities arise during the economic downturn, by using the advantage of lower capital costs to expand into markets with strong potential. As of 30 June 2010, Bossini had 611 (2009: 538) directly managed stores and 750 (2009: 640) franchised stores globally. Out of the 1,361 (2009: 1,178) stores in total, 733 (2009: 578) stores were located in mainland China. As a result, the overall retail floor area has significantly increased by 19%, to 445,300 sq. ft. (2009: 373,500 sq. ft.) in mainland China market, and also leading the group into a positive 13% sales growth to HK$528 million (2009: HK$468 million).

Our strong presence in the mainland China during the year under review has reflected its strong market growth potential, and more importantly, it emerged as the key growth driver in the medium to long term for our Group. Bossini aims to establish a stronghold in mainland China's growing apparel market with a plan to introduce over 230 new stores in the fiscal year of 2010/11, bringing the total number of stores in this region over 963. Moreover, the Group will also continue to invest and expand pragmatically and progressively in other markets of which a total of 8 new stores will be added to the Group's global distribution network. Total of 254 new stores will be added to the Group during the coming fiscal year.

"The global economies have shown signs of gradual recovery; and we are confident in and optimistic about the positive trends that guide us into the future ahead. To deliver sustainable growth and enhance profitability of the Group, our management is committed to achieve the following key objectives in the new fiscal year. These includes reinforcing our brand recognition, by enhancing the brand value of "be happy"; focusing on the expansion in the mainland China market to enlarge our distribution network coverage to second tier and smaller cities, and strengthening supply chain management to expedite to our response to market changes," Ms. Tsin said.

Ms. Tsin concluded, "We believe the accomplishment of these strategies will further develop our strong foundation which will preserve our leadership as one of the most valued apparel brand owner, retailer and franchiser in the Asia-Pacific region."

Bossini is a leading apparel brand owner, retailer and franchiser in the region. Headquartered in Hong Kong, Bossini launched its first retail store in 1987. Over the past two decades, the Group has rapidly established an extensive international operating platform and distribution network that extends to 1,361 stores covering about 33 countries and regions worldwide.