Daphne'S Annual Profit Slump, Active Inventory

International Holdings Limited announced on Tuesday that net profit in the 2014 fiscal year fell by 45.5%, from HK $329 million 100 thousand in fiscal 2013 to HK $176 million, and the basic earnings per share declined from HK $0.200 to HK $0.107.

In the annual report, the group pointed out that the contraction of profits was mainly due to China's economic downturn and weak consumer confidence, while regional and online retailers were competing for incentives. On the other hand, operating costs continued to rise, especially staff costs, plus before the Spring Festival.

Retailers' performance is seriously affected by delays and weather anomalies.

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The group board recommended that no dividend be paid for future development, while the dividend in the 2013 fiscal year will be HK $0.02.

Daphne international rose 7.11% on Wednesday and closed at HK $2.26 a day, which has fallen by 21.5% since 2015.

The group's annual revenue was HK $10 billion 355 million 600 thousand, down 0.87% from HK $10 billion 446 million 500 thousand in the previous year.

Among them, core brand Daphne and shoe sales fell slightly to HK $9 billion 492 million 600 thousand, the previous year was HK $9 billion 561 million 300 thousand, while same store sales had a low single digit decline.

In the second half of this year, the group restored the sales network of its core brand, with a net sales increase of 83 to 6402 year-round, and a substantial discount in the second half of the year to deal with the inventory level of the old products.

Sales of other brands, including love, Step Higher, Aldo and alsofs, recorded an increase of 14.6%, from HK $731 million 800 thousand to HK $838 million 400 thousand in the 2013 fiscal year, and we managed to turn around the deficit to achieve HK $17 million 900 thousand operating profit, which was HK $86 million 100 thousand in the previous year.

As a result of active inventory clearance during the year, the gross profit margin has narrowed by 50 basis points to 55.4% in the whole year, and 55.9% in the previous year.

However, the total value of inventories has declined, and the number of turnover days has dropped to 194 on the 198 day of the previous year, a marked improvement over the 208 day of the first half of 2014.