– Profit Attributable to the Owners of the Company (without fair value gain) Rises 46.1%;
– Trading Business Becomes the Group’s Growth Engine
Samson Paper Holdings Limited (“Samson Paper” and together with its subsidiaries, the “Group”) (stock code: 0731), announced its annual results for the year ended 31 March 2019. Over the years, the Group has been diversifying its business from running mainly the trading of paper products and the paper manufacturing businesses to an enterprise working in different fields. The trading business was able to contribute significant profit to the Group even when the market and operation environment was turbulent.
For the financial year under review, the Group reported a 2.6% growth in overall turnover from HK$5,759.6 million to approximately HK$5,907.8 million. The gross profit increased by 4.41% to approximately HK$560.0 million with the gross profit margin increased from 9.31% to 9.48%. As the Group recorded approximately HK$143.7 million fair value gain on investment properties for the year ended 31 March 2018, while the figure for the year under review was only HK$31.7 million, the profit for the year was approximately HK$119.7 million (2018: HK$204.3 million). The Group’s profit attributable to the owners of the Company (without fair value gain) rose by 46.1% from approximately HK$53.1 million to HK$77.5 million. Basic earnings per share were HK9.2 cents.
The Board has recommended the payment of a final dividend of HK2.0 cents per share. Together with an interim dividend of HK0.4 cent per share already paid, total dividend for the year will amount to HK2.4 cents per share, translating to a dividend payment ratio of approximately 28.0%.
Driven by the growth of domestic demand in addition to the Group’s profitability-driven strategy, turnover of paper manufacturing business achieved a satisfactory growth of 20.2% from HK$1,270.6 million to approximately HK$1,527.4 million. In terms of volume, the total sales tonnage of paper manufacturing business rose by 8.5%.
Trading business includes several key pivotal business units, including paper and board business as well as office supplies and consumable and FMCG business. The office supplies and consumable and FMCG business had a solid year with 15.0% increase on sales from HK$575.8 million to approximately HK$661.9 million. With emphasis on centralizing sourcing, optimizing supply chain efficiency and own brand strategy, the Group obtained sole distributorships of key international brands including baby diaper, tissue paper, and wines and they became the key drivers for the growth of the business.
In paper and board business, the sales performance has slightly dropped by 5.0% from HK$3,831.9 million to approximately HK$3,640.9 million while the sales volume decreased by 6.75% amid the softened trading environment in China and Hong Kong.
For the property development and investment business, the construction of properties at Nantong Business Park project with total gross floor area (“GFA”) of 16,306 sq.m. for the first stage of Phase 1A was completed. Once the relevant sales permit is approved, sales value of approximately RMB21.9 million will be recorded. Besides, application for a construction work planning permit on seven blocks of properties with total GFA of 18,730 sq.m. on the site for Phase 1B is in preparation. For the year under review, the rental income made from the investment properties with a value of HK$742.7 million as at 31 March 2019 rose by 14.1 % to approximately HK$22.6 million from HK$19.8 million last year. The construction work for the Xiamen project was completed. Part of the property with a GFA of 4,875 sq,m, was leased to a third party for the use as an office/ warehouse hybrid. It contributed a total of approximately HK$0.4 million to the Group’s revenue.
For others business, the Group has also engaged in the aeronautic parts and services business, marine services business and logistic services business. These business segments together contributed approximately HK$55.0 million, 0.9% (2018: HK$61.8 million, 1.1%) of the Group’s total revenue.
The Group plans to extend its FMCG business to more cities in the PRC and secure more distributorships and introduce a wider range of quality and popular products to China. As for the paper and board business, the Group is assessing the possibility to set up a sales office in Southeast Asia so as to achieve better cost control and further geographic market diversification.
As for the property development and investment segment, the Group is confident that a more prosperous and profitable business development of this segment will follow after the completion of Phase 2 and 3 at Nantong Business Park. The selling price per sq.m. of that region has been increasing by more than 35% since 2016. As the development of the Park becomes more mature, the Group expect to record a greater revenue derived from this project in the future.
In the paper manufacturing segment, the Group will upgrade its production facilities and power plant in order to achieve cost savings and to streamline and centralize internal processes for greater efficiency.
Mr. LEE Seng Jin, Deputy Chairman and Chief Executive Officer of Samson Paper said, “Looking ahead, the Group will devote more resources in expanding our trading businesses as well as the property development and investment businesses. Although market conditions are expected to remain tough, we believe that there are still many opportunities for growth and Samson Group has prepared well to grasp these market opportunities.”
About Samson Paper Holdings Limited (Stock code: 0731)
Samson Paper is the largest paper merchant in Hong Kong. It has over 20 sales offices in major coastal industrial and inland cities in the PRC, and branches in Singapore, Korea and Malaysia, helping it distribute products of over 100 global paper brands. Building on its solid foundation, the Group has been evolving, turning itself from a paper trader into an integrated distribution services provider with capability in diverse business pursuits including trading, logistics solution, property development and investment, wholesale and franchise distribution.
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