Pacific Textiles Holdings Ltd., which has both warp and weft knitting operations, has reported revenues of HK$3,032.9 million for the six months ended 30 September 2009, representing a 18.9% growth over the same period last year, mainly driven by strong volume gains. Profit attributable to equity holders of the company was HK$388.5 million, representing a significant increase of 113.7% over the corresponding period of last year. Net profit margin rose to 12.8% (2008: 7.1%). Basic earnings per share were HK27 cents (2008: HK 13 cents).

Total sales volume during the period surged 17.4% to 100.3 million pounds, attributable to the group’s expanded production capacity, its broadened customer base, as well as increased orders from existing clients. The group also saw a slight growth in average selling price year-on-year despite strong pricing pressure during the period.

Pacific says that its enhanced operational efficiency, effective cost control measures, expanded manufacturing facilities as well as the optimal utilization of the group’s production capacity, helped gross profit during the period to jump 82.1% to HK$616.3 million. The drop in commodity prices during the reporting period also contributed to the improvement of the gross margin from 13.3% to 20.3% year-on-year. The company says that its effort in expanding production capacity and upgrading production facilities has enabled it to enjoy better economy of scale and higher productivity.

According to Pacific, during the period, weakened demand stemming from the uncertain economic climate and a further tightening in credit facilities by banks as well as environmental regulations by the government had exerted pressures on all players of the industry, in particular the small and medium enterprises, washing out companies which failed to meet the immediate financial and economic challenges. On the other hand, the global economic downturn also resulted in some strong industry players enhancing propositions and actively pursuing new opportunities to fill gaps in the market. During the period under review, Pacific Textiles says it managed to uphold its competitive edge and leverage its core competencies to maintain competitiveness, thus not only enabling it to weather the storm and increase its market share, but also build a stronger company benefiting both customers and business partners.

Pacific’s top five customers accounted for approximately 52.1% of the group’s turnover compared to 36.7% in the same period last year. Though the industry was confronted with uncertain market conditions and weakened demand in the US, through its active expansion strategy to diversify its geographical market reach with a focus on China and Japan, and the group’s comprehensive production facilities and quality management, coupled with growing demand for quality and value-added products, the group was able to make satisfactory progress in expanding its sales to the target markets and sustained business growth.

Riding on its solid relationships with leading brands, including, Maidenform, Marks & Spencer, Triumph, UNIQLO, VF Intimates and Victoria’s Secret, as well as well known Chinese brands such as ANTA Sports and Maniform, Pacific continued to enjoy stable purchase orders despite the trying business environment. The Group’s top five brand owners contributed approximately 53.8% to its overall sales versus 43.2% for the same period last year.

Interim results for the six months ended 30 September 2009