Cost falls buoy Cafe de Coral by Beth Ye, The Standard HK
Cafe de Coral Holdings (0341) said its net profit for the six months ended September 30 grew 10.3 percent to HK$221.4 million, thanks to falling food costs.
The company distributed an interim dividend of 17 HK cents per share, which is 13.33 percent higher than last year.
Chairman Michael Chan Yue-kwong said the company feels confident the economy is recovering. He estimates a double-digit profit growth this Christmas, compared with the same period last year.
In order to boost capacity, the firm's central food processing plant in Hong Kong and the logistics center in Guangzhou are expected to start production by 2010 and 2011 respectively.
The two factories could increase the company's profit by one and two percentage points in Hong Kong and the mainland.
Cafe de Coral is also targeting expansion
by increasing the number of stores in southern China from 62 to 200 before 2014. "The current growth rate is
adding 15 to 20 stores each year, costing HK$50 million to HK$80 million a year," Chan said. "And the growth rate will be speeded up when we have more than 100 stores" in southern China.
Capital expenditure will increase to HK$2 billion to HK$2.5 billion each year in 2010 and 2011, he said.
The company had a turnover of HK$2.39 billion for the past six months, and has cash on hand of more than HK$881 million.
"The dividend payout ratio will be maintained at 70 percent," as the company will use the remaining cash to buy its own stores back and make other purchases in China.
The
business in North America posted a book loss of HK$1.05 million before tax for the first half of 2009, but Chan forecast it will turn around next year.
Chan also said the company would
continue to hold its stake in The Link Real Estate Investment Trust (0823). "We may increase our stakes as hedging if Link raises our rents at their malls," he said.
http://www.thestandard.com.hk/news_deta ... 91126&fc=7
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