Tao Heung profit up 20% to HK$125mn

Rapid China growth and successful cost control fuelled the group’s growth.

Tao Heung Holdings Limited (“Tao Heung”), a leader in Chinese culinary trend, announces its interim results for the six months ended 30 June 2011.

The Group’s total revenue was increased by 22.6% to approximately HK$1,706.9 million. This was due to the opening of five new shops; ample growth from the Mainland China operations owing to a healthy economy and increased spending; and launch of several prominent promotions in Hong Kong that helped maintain customer traffic. Gross margin realized moderate growth, rising from 15.4% to 16.7%, while EBITDA increased by 20.7% to HK$259.7 million, up from HK$215.1 million recorded in the first half year of 2010. Profit attributable to owners of the parent was HK$125.3 million, an increase of 20.0% compared to HK$104.4 million over the same period last year.

The Board has proposed an interim dividend of HK6.2 cents per share for the six months ended 30 June 2011, representing a dividend payout ratio of 50.3%, according to a Tao Heung report.

Mr. Eric Leung, CEO of Tao Heung, said, “We are very excited to achieve more than 20% growth in both revenue and profit amidst an increasingly challenging environment marked by inflation and the legal requirement of a minimum wage in Hong Kong. Our timely set-up of logistics centres once again proved effective in implementing cost control. By leveraging a more closely integrated vertical food supply chain after a poultry farm acquisition, complemented by greater automation and workflow re-engineering, we are capable of bolstering operational efficiency and delivering profit growth during the review period.”

Mr. Chung Wai Ping, Chairman of Tao Heung, concluded, ”The management continues to develop formidable businesses in Hong Kong and Mainland China, supported by advanced infrastructure and reputation for being a champion of food safety, in the knowledge that it is building on a tradition of excellence that can be traced back 20 years. While we certainly cherish our 20th anniversary this year, the management is clearly committed to laying the groundwork so that Tao Heung can continue to enjoy fruitful and healthy growth in the decades to come.”