Share buyback on cards as CTF profit rises 11pc

Chow Tai Fook Jewellery Group (1929) posted an 11.4 percent year-on-year growth in net profit to HK$6.7 billion for the year ended March and plans to buy back up to 10 percent of its shares.

Earnings per share were HK$0.67 and it purposed a final dividend of HK$0.28, it said in a filing yesterday.

Revenue for the year soared by 41 percent to HK$98.94 billion, boosted by the resilient demand for gold jewelry and products, as well as its retail network expansion in mainland China.

Gross profit increased by 11.3 percent to HK$22.3 billion but the adjusted gross profit margin declined by 480 basis points to 23.4 percent mainly due to a higher sales contribution from its wholesale business and gold jewelry and products.

The retail network expanded to 5,902 points of sale as of 31 March, with a net addition of 1,311 POS during the financial year, it said.

The company also released its retail sales value for April and May, which dropped by 13 percent year-on-year - retail sales declined by 12.8 percent in China, and 14.2 percent in Hong Kong, Macau, and other markets.

Same-store sales for the mainland market in the two months plunged by 28.2 percent, while that of Hong Kong and Macau also slid by 5.9 percent.

CTF said it believes the proposed share buyback would enhance the value of its shares and the plan also reflects its confidence in its long-term business prospects.

It said it intends to finance the shares repurchase with its existing available cash reserves as the current financial position is "solid and healthy."

It has also appointed executive directors Conroy Cheng Chi-heng and Sonia Cheng Chi-man as vice-chairmen with immediate effect.

Conroy Cheng is a nephew of both chairman Henry Cheng Kar-shun and executive director Wilson Cheng Kam-biu, while Sonia Cheng is the daughter of Henry Cheng, it said in a separate filing.

Also controlled by the Cheng's family, New World Development's (0017) healthcare arm Humansa said it has acquired mainland pediatrics, obstetrics & gynecology clinic Noah Healthcare.