29th Sep 2014 07:46
LONDON (Alliance News) - Shares in Camkids jumped Monday after the China-based company reported higher profit and revenue for the first half of 2014, and raised its interim dividend, highlighting a confident outlook for the business.
The Chinese designer and manufacturer of kids and teenage outdoor clothing posted a pretax profit of CNY126.4 million for the six months to June 30, up from CNY121.9 million in the first half of 2013.
Revenue in the period also increased by 5.8% to CNY458.8 million, up from CNY433.7 million a year earlier.
The company said its prospects are solid and its looks to the future with confidence, citing that its well placed to offer consumers a "high quality product at a competitive price".
"Our core strategy of focusing on the larger cities, municipalities and provinces remains the same and is continuing to deliver solid trading results for us. At the same time, however, by also increasing our focus on tier three and tier four cities throughout China we believe that this will help to negate some of the current challenges in our end markets in terms of increased international competition and pressure on pricing," said Executive Chairman Zhang Congming in a statement.
Signalling its confidence, the company declared an interim dividend of 2.4 pence per share in scrip or 2.0 pence per share in cash. Last year it declared an interim dividend of 2.3 pence.
The company said it continues to be highly cash generate, and at June 30 has a strong cash positive of CNY485.5 million, a 70% increase on the comparable period last year.
Camkids designs its entire product range and manufactures the majority of its footwear. Outdoor apparel and accessories are currently manufactured by third party original equipment manufacturers.
The group's primary route to market for the sale of its products is through its network of distributors.
It currently has 17 authorised distributors operating over 1,285 franchised retail outlets, and is in the early stages of developing an online e-commerce platform to target online retail, a big growth opportunity it sees in China.
Camkids said it continues to grow, despite a backdrop of a slowing Chinese economy and in a sector - children's sportswear for outdoor activities - in which a number of international brands have started to provide larger discounts on their product ranges on sale in China.
The company recently decided it was time to buy an additional piece of land not far away from its existing premises in Jinjiang in order to develop its new facilities, as all five of its current production lines have been operating at over 85% capacity. Camkids said that while it has now identified a site, although a contract has not yet been signed, it remains hopeful that negotiations will soon complete and construction will commence in early 2015 with the new facility being ready by 2016.
Camkids shares were trading 15.8% higher Monday morning at 51.5 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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