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Profit Increases 0.7% to HK$93.5 million

Board Recommends Interim Dividend of HK4.5 cents

Interim Highlights

Profit increased by 0.7% to HK$93.5 million
Gross profit margin improved by 3.3 percentage points to 29.5%
Basic EPS grew 0.5% to HK7.70 cents
Board of Directors recommended an interim dividend of HK4.5 cents
Strong balance sheet reflected by the Group’s net cash position with a cash-on-hand balance of HK$1,045 million
 

(Hong Kong, 24 June 2013) Pico Far East Holdings Limited (“Pico”, “the Company” or “the Group”, HKEx: 0752), a leading global Total Brand Activation company, today announced its 2013 interim results for the 6 months ended 30 April 2013 (the “Period”).

During the Period, Pico recorded a turnover of HK$1,629 million (1H2012: HK$1,807 million). Profit attributable to owners of the Company increased by 0.7% to HK$93.5 million due to improvements in our gross margin which has increased by about 3.3 percentage points from 26.2% to 29.5%. Basic earnings per share is HK7.70 cents compared to HK7.66 cents in the previous corresponding period. The Group maintained a very healthy financial position, as reflected by the Group’s net cash position, with a cash-on-hand balance of HK$1,045 million.

The Board of Directors recommended an interim dividend of HK4.5 cents per ordinary share, compared with HK4.0 cents in the previous period.

Mr. Lawrence Chia, Chairman of Pico, said, “Despite there being no mega-events like the Olympics, World Expo or World Cup occurring in 2013, we have been able to deliver a good set of results in the first half of the financial year. Due to our persistence in delivering quality services and creating the best returns to our clients, we have been able to win new and repeat contracts for events.”

Business Review

The Exhibition and Event Marketing Services segment performance remained resilient.

Highlights include the 15th Auto Shanghai, Affordable Art Fair in Hong Kong and Singapore, and the GITEX Gulf Information Technology Exhibition in Dubai. We also handled events for Airbus, Amway, Audi, BAE, Bloomberg, BMW, Charriol, Chevron, Goldman Sachs, Huawei, Lexus, Maersk, Mercedes-Benz, Nissan, Peugeot, Raytheon, Toyota and Volkswagen. Concurrently, Pico also completed several projects for event organisers or sponsors such as the COP 18 UN Climate Change Conference in Doha, the HSBC Golf Champions in Abu Dhabi and Singapore, the Cathay Pacific/HSBC Hong Kong Sevens and the McDonald’s China Managers’ Convention in Taipei.

After successfully completing a temporary overlays contract for the Sochi Winter Olympic test events in early 2013, Pico's sports event specialists also won a contract for the Sochi 2014 Winter Olympic and Paralympic Games.

The Brand Signage and Visual Communication business segment delivered growth.

The PRC Central Government policy remains focused on stimulating domestic consumption, which should deliver benefits to this segment of the Group’s business. During this period, Pico has secured new contracts from car brands like Chevy, Chrysler, Dodge, Jeep and Lexus; and continue contracts with Jaguar, Mercedes-Benz and Shanghai General Motors. Pico also won global contracts with Chevy, Mercedes-Benz, Rolls-Royce and Rousseau-Peugeot.

The Group won new contracts in the banking sector as well, with firms including the Agricultural Bank of China, Bank of Shanghai, Citibank and Shanghai Rural Commercial Bank. In Hong Kong, Pico also won signage contract from the MTR Corporation. In addition, the Group maintained contracts with existing fast food chain clients like Burger King, Costa Coffee, Dairy Queen, KFC and Yoshinoya.

The Museum, Themed Environment, Interior and Retail segment performed better.

During the period, we successfully completed a number of projects including the ACE Jerneh Insurance corporate office in Kuala Lumpur; Apple, Canon, Panasonic and Samsung showrooms in Hanoi, the Johnson & Johnson corporate office in Malaysia and the Qatar Television Studio in Doha.

We have also commenced work on contracts with Shanghai Disneyland, the Singapore Science Centre and Marina Bay Sands’ ArtScience Museum. These contracts will be completed over the next eighteen months.

The Conference and Show Management segment performed in line with expectations.

Highlights of the first half of financial year 2013 include the 14th Asia Pacific Life Insurance Congress in Manila, 50Plus Expo in Singapore, Asia Game Show in Hong Kong and the Consumer Fair in Sri Lanka.

Prospects

Looking ahead, the Group’s business in Asia will continue to be a key growth driver for the remainder of the financial year. In the second half of the financial year, the Group will deliver a number of high-profile projects including the Singapore National Day Parade, Art Basel in Hong Kong, the Mobile Asia Expo in Shanghai and the Asian Attractions Expo in Singapore; along with ongoing contracts for existing clients and new clients like Amway, Audi, BMW, Huawei, Nokia, Porsche, Rolls-Royce, Samsung and Yara.

The Group has expanded its Beijing and Shanghai operations into two new purpose-built facilities. These are office, operation and production complexes of 17,000 square metres and 41,000 square metres respectively. When they come on stream in the second half of this financial year, these premises will double our existing capacity and enhance our ability to capture business opportunities in the PRC.

The Group will also continue to pursue business in emerging markets like the Philippines, Indonesia and Vietnam. In the Middle East, our regional headquarters in Dubai will continue to stay on top of the business progress in the Arabian Gulf and North African markets.

While we are aware of the need to maintain a well-connected international network of operations, we have been careful in managing our operations in the weaker economies by maintaining expense control while staying on the lookout for mega international events which rotate into these countries such as the World Expo 2015 to be held in Milan.