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Chairman's Statement

The year under  review has proved  to be one of volatility. While the Group  continued to record  a modest  growth in sales in the first half of this fiscal year, the prudent  forecast expressed  in our interim report and 3rd quarter  operational update  were well founded.  The cautious  consumer spending, softness  of business  demand as well as tighten  in inventory  level in the supply chain  have all negatively impacted our results in the second  half of fiscal 2016.  Sales revenue  for the year marginally increased to HK$1,179  million  as compared to HK$1,170  million  in previous  year,  both  the  gross profit  and  after  tax earnings declined by 4% and 5% respectively.

The market  condition continued to be challenging and  the consumer demand remains  softened.  The cautious  inventory management and  price  competition in the  supply  chain  has  added  pressure  to the  gross margin  in our  operations. Accordingly, the gross profit margin for the year has declined to 18% from 19% in previous year.

During the year we continue to recalibrate  our portfolio of manufacturing sites by adding our capacity  overseas to ensure we continue to be strategically  placed  to serve our markets  and  are managing  the escalating  cost trend  within  our operating environments. Towards  the end  of the fiscal year,  the proportion of production from the overseas  plants  has increased to 60% of our global capacity  whilst China accounted for the remaining  40%. In response  to the challenging market, we have invested in various projects and systems including  new production planning  system as well as Product Lifecycle Management (“PLM”) system  for optimizing  our  planning  and  business  processes.  These  additional tools  will further integrate  our people,  processes  and  systems,  and  enable  us to be more  competitive to face the challenging market  in the future.

In the months  ahead,  with the expected weakness  of business  demand, and the challenges  confronting  us, we will continue to evaluate  the maintenance of the current  production capacity  and  assess the strategic  and  cost effectiveness  of all our operations and facilities. Our focus will always be on the long term growth and sustainability  of our business.

During the year, the Group  has started to work on the corporate sustainability  development and the first report  is expected to complete in next fiscal year.

Having considered our cash position  and the coming  investment  needs,  the Board has decided to propose  a final dividend of HK$0.05 per share for the year ended  30 June 2016 (2015: HK$0.05 per share)

On behalf of the Board members,  I would like to take this opportunity to thank our employees for their hard work and contributions to the Group over the year.


Wong Chung Chong

26 August 2016

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