Tuesday, August 4, 2020
 
Columnist
Martin Hennecke
 
VANTAGE INT'L
HKEx Stock Code : 00015 
 
Corporate Profile
The principal activities are a wide range of construction, civil engineering, renovation and other contract works in public and private sectors in Hong Kong, property investment and development.

Business Review - For the year ended March 31, 2013

Contract Works

The Group's contract works segment has recorded a turnover of HK$3,454,844,000 for 2012/13, increased by 17.6% from HK$2,936,582,000 for 2011/12. Facing inflation pressure under the prolonged ultra-low interest rate environment, the Group's managed to maintain a stable profit margin which only recorded a slight decrease from 5.4% for 2011/12 to 5.2% for 2012/13. The overall segment profit from contract works business increased by 14.1% to HK$181,376,000 for 2012/13 from HK$158,943,000 for 2011/12.

Besides our wholly-owned subsidiaries, we also engage in contract works through jointly-controlled entities. For 2012/13, our share of profits of the jointly-controlled entities, net of tax, amounted to HK$30,812,000, decreased by 31.2% from HK$44,760,000 for 2011/12. The profit is primarily attributable to our share of profit of the Leighton-Able Joint Venture, in which we have 49% interest and which undertakes the contract for the design and construction of North Lantau Hospital and our share of profit of Fungs E&M Engineering Company Limited which we have 40% interest.

During 2012/13, the Group continued to secure an impressive amount of significant contracts from both the public and private sectors. As a result, we are much delighted to report that the total and outstanding values of the Group's substantial contracts on hand as at 31 March 2013 were approximately HK$10,800 million and HK$7,712 million, respectively. We expect these jobs on hand will be completed in one to four years.

Property Investment and Property Development

Our investment properties were valued at an aggregate value of $419,600,000 as of 31 March 2013 (2012: HK$953,520,000) by an independent professional valuer. The significant decrease in the Group's investment properties portfolio in 2012/13 was mainly due to the disposal of the Group's investment properties in relation to the shop units in Argyle Centre, which completion took place on 28 February 2013 (the ˇ§Major Disposalˇ¨), and the change of intention in developing the Belfran Road project from a long term investment to sale in 2012/13.

As a result of the annual revaluation, we posted an aggregate gain of HK$38,080,000 for 2012/13 (2011/12: HK$90,581,000) on changes in fair value of investment properties.

Meanwhile, property investment business continued to provide stable and recurring revenue to the Group. The Group's rental income arose mainly from the leasing of retail shops. During 2012/13, the Group recorded a gross rental income of approximately HK$21,809,000 from its investment properties, representing a 4.6% increase from HK$20,859,000 for 2011/12. The increase in rental income comprised primarily the renewal of tenancy contracts for the investment properties at Fu Wah Centre, No. 210 Castle Peak Road, Tsuen Wan and at Argyle Centre, Phase I, Mongkok.

The projects for the redevelopment of the sites at Nos. 92A-E Pokfulam Road, Hong Kong and No. 9 Belfran Road, Kowloon into residences and Nos. 123- 127 Tung Choi Street, Kowloon into a hotel are progressing satisfactorily.

Disposal

From the Major Disposal and the disposal of another investment property at Garden Suit No. 37B of House 37 and Car Parking Space No. 78 on Platform A of Forest Hill, No. 31 Lo Fai Road, Tai Po, New Territories, the Group realised a total net gain on disposal from investment properties of HK$141,161,000 and a total net cash inflow (after deduction of loan repayment and respective transaction cost) of approximately HK$266 million. This provided the Group with sufficient resources to consider new investment opportunities in property investment and property development business that offer a better and more attractive return.

Acquisition

As set out in note 17 to this announcement, the Group entered into a share transfer agreement with Mr. NGAI for the Acquisition on 19 March 2013. Completion of the Acquisition took place on 22 May 2013. The Group intends to redevelop the property held by the Flower Ocean Group at No. 28 Lugard Road, The Peak into residential houses for sale or for rental purpose.

Business Outlook - For the year ended March 31, 2013

The continuing weak US economy and sovereign debt crisis in Europe suggest that global economics continued to stall. As an open economy, business activities in Hong Kong were inevitably hindered. Amidst such an adverse global environment, the HKSAR Government increasing expenditure on infrastructure projects, accelerated programmes on public housing development and proposed to develop the North East New Territories New Development Areas that the Directors believe the outlook of the construction and engineering industry looks promising in the near to medium future.

The Hong Kong property market remains buoyant and the property prices continue to surge in recent years. Although the HKSAR Government has introduced a number of cooling measures to combat against the rising in property prices since November 2010, its impact on the property price is mild and the Directors are still optimistic about the medium to long term prospect of Hong Kong's property market. As a result, the Group will actively move ahead in the property development business and will seize suitable and valuable investment or development opportunities. Leveraging our core construction expertise, we believe that further development in the property development business will overtime bring substantial enhancement to the Company's financial performance.

Upon the final completion of the hotel development at Tung Choi Street, Kowloon in 2013/14, the completion of residential developments at Nos. 92A-E Pokfulam Road, Hong Kong and No. 9 Belfran Road, Kowloon in the financial year of 2014/2015, the potential redevelopment at No. 1 Wood Road, Wanchai and at No. 28 Lugard Road, The Peak, the Group is looking forward to receiving remarkable income from the property development business.

Looking forward, the management will keep up efforts to grasp new investment opportunities and bid for more jobs to sustained the Group's profitability and continued to pursue our strategy of maximizing value for shareholders.

Source: Vantage Int'l (00015) Annual Results Announcement
Chairman NGAI Chun Hung Issued Capital (shares) 1,747M
Par Value HKD 0.025 Market Capitalisation (HKD) 1,275M
 
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