1996/97 Interim Announcement
RESULTS
The Board of Directors of Guoco Group Limited ("the
Company") is pleased to announce the unaudited consolidated net profit
of the Group, after exceptional items, taxation and minority interests,
for the six months ended 31st December, 1996 together with comparative
figures for the corresponding period last year as follows :
Six months Six months
ended 31.12.96 ended 31.12.95
(unaudited) (unaudited)
Note HK$'000 HK$'000
Turnover 1 6,663,066 5,229,343
=========== ===========
Operating profit before
exceptional items 1,595,850 1,286,278
Exceptional items 2 355,090 47,509
----------- -----------
Operating profit after
exceptional items 1,950,940 1,333,787
Share of profits of
associated companies 241,046 120,466
----------- -----------
Profit before taxation 2,191,986 1,454,253
Taxation 3 (512,655) (347,104)
----------- -----------
Profit after taxation 1,679,331 1,107,149
Minority interests (624,348) (298,799)
----------- -----------
Profit attributable to
shareholders 1,054,983 808,350
Dividend (106,658) (98,125)
----------- -----------
Retained profit for the
period 948,325 710,225
=========== ===========
Earnings per share 4 HK$2.47 HK$1.89
=========== ===========
Notes:
2. Exceptional items
Six months Six months
ended 31.12.96 ended 31.12.95
HK$'000 HK$'000
Net profit on disposal of
investments in subsidiary
and associated companies - 207,920
Net profit on disposal of investments - 99,819
Net profit on disposal of premises 251,504 -
Written back/(loss) on compulsory
acquisition of land 103,586 (260,230)
---------- ----------
355,090 47,509
========== ==========
3. Taxation
Six months Six months
ended 31.12.96 ended 31.12.95
HK$'000 HK$'000
Hong Kong profits tax 198,617 130,084
Overseas taxation 432,840 36,938
Deferred taxation (197,248) 127,161
Share of associated companies'
taxation 78,446 52,921
---------- ----------
512,655 347,104
========== ==========
Hong Kong profits tax is provided on the estimated assessable profits for the period at the
Deferred taxation is provided using the liability method in respect of the taxation effect arising
4. Earnings per share
The calculation of earnings per share is based on the profit attributable to shareholders for
5. The accounts of the Company are maintained in United States dollars. The accounting figures
6. Certain comparative figures have been reclassified to conform with the current period's
REVIEW OF ACTIVITIES
The Group's profit for the six months ended 31st December, 1996 rose
by 30.5% to HK$1,055 million. The following is a review of the operation
of the major members of the Group.
Dao Heng Bank Group Limited ("DHBG")
DHBG, the Group's 70% owned listed subsidiary in Hong Kong recorded a consolidated profit attributable to shareholders of HK$ 1,098 million, an increase of 62.7% over the same period last year. As of 31.12.96, DHBG's's loan to deposit ratio was 60.3% while the cost to income ratio was 37.3%.
Dao Heng Bank Limited ("Dao Heng") has recently had two public issues, a HK$1.5 billion FRCD in December 1996 and a ten year US$350 million Yankee bond in January 1997. The latter is considered to be a landmark issue for the entire Yankee sector due to its size, which was the largest Yankee issue to date by an Asian bank outside of Japan, and since it was the first subordinated issue by a Hong Kong based bank. This has enabled Dao Heng to source additional Tier II capital and to develop a yield curve extending out to ten years at very competitive effective rates.
DHBG's local branch network has reached 95 branches. Rapid growth continues to take place in our credit card company. In the Philippines, DHBG's 60% subsidiary Dao Heng Bank, Inc. has expanded its branch network to 7 domestic branches in order to capture the opportunities arising from the increasingly promising Philippine market.
Guoco Land Limited ("GLL")
The Group recently completed the acquisition of Lap Heng Company, Limited, a listed company in Hong Kong and changed its name to Guoco Land Limited. Subject to approval by its shareholders, First Capital Corporation Ltd will acquire 20% from the Group's present holding of 70% of the share capital of GLL.
The management of GLL is currently reviewing joint venture opportunities with other major property developers in respect of Government Land auctions and other development projects both for commercial and residential properties.
First Capital Corporation Ltd ("FCC")
FCC, the Group's 58% listed subsidiary in Singapore, achieved satisfactory results during the period with profit before tax recorded at S$ 145.4 million (HK$ 803.4 million) representing an increase of 53% over the corresponding period last year. The directors of FCC have declared an interim dividend of 5% or 5 cents per ordinary share less 26% income tax, amounting to approximately S$10.7 million (HK$59.1 million) for the financial year ending 30th June, 1997.. FCC's primary business activities continue to be in property investment and development both in and outside Singapore. FCC enlarged its land bank by acquiring 5 additional plots of land totalling approximately 71,200 sq. metres at Nathan Road, Paterson Road, Tanjong Rhu, Robinson Road and Bishan. In October 1996, FCC entered into an Agreement to acquire a 33.7% interest in Benchmark Group PLC, a company listed in the London Stock Exchange, which has a property portfolio of 15 properties in Central London valued at £144 million.
Hong Leong Credit Berhad ("HLC")
The Group's 20% owned Malaysia listed associated company reported a consolidated profit before tax for the six months ended 31st December, 1996 of RM261.6 million (HK$ 800.5 million), an increase of 34% over the previous financial year's corresponding period figure of RM195 million.
Guoco Holdings (Philippines), Inc. ("GHPI")
GHPI, the Group's 37% owned listed associated company in the Philippines recorded consolidated income after tax of Peso335.1 million (HK$98.6 million), a satisfactory 104% increase over the corresponding period last year. Retained earnings as at 31st December, 1996 amounted to about Peso 1.9 billion (HK$0.56 billion).
GHPI has signed a Memorandum of Agreement recently to acquire a 53% interest in Pepsi-Cola Products Philippines, Inc.
Other Subsidiaries
The Group's insurance, stockbroking and fund management business recorded satisfactory results during the period under review. Dao Heng Securities Limited achieved substantial increase in earnings from its share margin finance business and corporate finance activities. Dao Heng Fund Management Limited is focusing its marketing activities on the "Dao Heng Pooled Retirement Plan" in view of the imminent enactment of the Mandatory Provident Fund legislation by the Government. In an effort to further diversify its product range, Dao Heng Insurance Co., Limited has introduced new products such as "Home Care" and "Accident Care" and has obtained the requisite licence from the Insurance Authority to engage in medical insurance business. Guoco Investments (China) Limited has disposed of its entire stake in the optic cable factory and the disposal of its ceramic tiles factory is pending completion.
Outlook
China's inflation rate has now been contained at a single digit level and its economy is forecast to grow on a sound sustainable basis. With the transition to Chinese sovereignty now well underway, Hong Kong's own economy is also expected to achieve sound growth and the Group is confident that it is well positioned to participate in that growth.
APPOINTMENT AND RESIGNATION OF DIRECTOR
The Board of Directors of the Company is pleased to announce that Mr. Harry Richard Wilkinson has been appointed as an independent non-executive director of the Company with effect from 24th March, 1997.
The Board of Directors of the Company also announces that Mr. Adel Mohammad A.H. Al-Roumi resigned as a director of the Company with effect from 24th March, 1997. The Directors of the Company would like to thank him for his contribution to the group in the past.
DIVIDEND
The Directors have declared an interim dividend of HK$ 0.25 per share amounting to HK$106,658,000 (1995/96 interim dividend: HK$0.23 per share amounting to HK$98,125,000) for the financial year ending 30th June, 1997 which will be payable on 15th April, 1997 to the shareholders whose names appear on the Register of Members on Monday, 14th April, 1997. .
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SHARES
During the period, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed shares.
CLOSURE OF REGISTER OF MEMBERS
The Register of Members will be closed from 8th April, 1997 to 14th April, 1997, both days inclusive, during which period no transfer of shares can be effected.
In order to qualify for the above dividend, all share transfers accompanied by the requisite share certificates must be lodged with the Company's Branch Share Registrars in Hong Kong, Central Registration Hong Kong Limited, at 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong, for registration not later than 4:00 p.m. on 7th April, 1997.
By Order of the Board
Hong Kong, 24th March, 1997