23rd Apr 2015 11:49
LONDON (Alliance News) - Camkids Group PLC on Thursday said its pretax profit in 2014 fell on the back of lower revenue, as the group was hit by tough trading conditions in China which resulted in the cancellation and postponement of sales.
The Chinese outdoor clothing and equipment company said trading so far in 2015 has been weak as well and is expected to continue in that fashion.
Camkids' pretax profit fell to CNY238.5 million in 2014 from CNY304.7 million in 2013, as revenue declined 6% to CNY1.02 billion from CNY1.08 billion.
Though revenue in its footwear business was higher in the year, sales in its clothing and equipment and accessories divisions both fell. The group said it did manage to maintain its gross margin despite many brands offering greater discounts in the Chinese market.
Camkids said it saw a number of factors at play in 2014, which resulted in the cancellation and delay of sales orders in the year. In particular, the company cited slowing growth in the Chinese economy and the ongoing anti-corruption crackdown and frugality campaigns by the Chinese government, which have hurt consumption.
As a result of the challenging conditions, the company said it has decided to not recommend a final dividend, having paid a 2.4 pence interim dividend. Last year it paid a final dividend of 2 pence per share, giving it a total dividend of 4.3 pence.
"We are pleased with our performance during 2014 in what remains a challenging time in China. During the year ahead we expect the industry to continue to consolidate and the larger players to gain market share at the expense of the smaller operators, and we hope to be able to take advantage of this," said Executive Chairman Zhang Congming.
Congming added that in the first two months of 2015, sales were down 5% and its order book for the spring/summer collection is down 38% year-on-year. It expects this trend to continue into the second half and has delayed the construction of a new plant due to the gloomy outlook.
The Camkids chairman said the company will "focus our production on the most productive manufacturing lines and adjust our work force accordingly" and will "continue to review our cost base" amid the tough market environment.
Shares in Camkids were down 18% to 29.00 pence on Thursday, one of the worst performers in the AIM All-Share, following its midday announcement.
By Sam Unsted; [email protected]; @SamUAtAlliance
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