NET PROFIT UP 12.1% TO HK$135,300,000
TURNOVER UP 5.2% TO HK$1,803,512,000
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SUSTAINABLE GROWTH IN CORE BUSINESS
THROUGH INNOVATION, STRATEGIC INVESTMENTS & PARTNERSHIPS
(Hong Kong, 22 January 2007) PICO Far East Holdings Limited ("PICO" or the "Group" SEHK: 0752), a global event marketing company, today announced its annual results for the year ended October 31, 2006 (the "Period").
During the Period, PICO achieved a net profit of HK$135,300,000 (2005: HK$120,646,000), representing a rise of 12.1% over the same Period last year. Turnover amounted to HK$1,803,512,000 (2005: HK$1,714,784,000), representing an increase of 5.2% over the same Period last year.
The Board of Directors has recommended a final dividend of HK 3.5 cents per share (2005: HK 3.5 cents).
Mr. Lawrence Chia, Chairman of PICO, said, in 2006, many multinational enterprises and brands have adopted the strategy of active engagement in exhibition and event marketing activities in order to secure higher profits. With an international clientele, PICO has benefited from the growth of exhibition, event marketing, interior design and sign advertising businesses, which in turn, generates sustainable growth for the Group.
Mr. Chia added, investors are buying into the introduction of the Las Vegas concept across Asia. Riding on the rising trend of the MICE (Meeting, Incentive, Convention, Exhibition) market, the Group is expecting a banner year in 2007. PICO expects the China market to grow rapidly in coming years due to the tourism concept associated with the 2008 Beijing Olympics and the Shanghai World Expo 2010. PICO is well positioned to benefit from the forthcoming business opportunities. Thanks to our presence in the emerging markets such as India, Vietnam, and Macau, combined with our versatile experience in global event marketing and related fields, we will further develop our business in 2007. This will enable PICO to achieve strong growth not just in Asia but around the world as well.
The Group has enjoyed stable, sustained growth in turnover and profit through innovation and improvement in its business structure, services, and delivery channels.
Exhibition and Event Marketing Services
This is PICO's core business. It is the Group's largest segment, accounting for 81.6% of its turnover (2005: 69.1%). The Group adopted innovative approaches such as experiential marketing and focused event marketing, to create opportunities for companies to meet their expectations. As a result of this business strategy, this segment continued to generate cash and contribute substantial repeat revenues throughout 2006. During the Period, the Group organized many special events and provided services at more than 600 major exhibitions. The highlights included preparing the venue for the IMF-World Bank meetings and serving as official technical service provider for ITU Telecom World 2006.
Hall Management and Related Services
This segment accounted for 4.6% (2005: 2.4%) of the Group's turnover. The Group currently manages three main exhibition and convention facilities in three major cities: Chongqing, Ho Chi Minh City and Colombo. Business continued to develop positively during the Period, with the operating margins in Vietnam and Sri Lanka higher than the same Period last year. During the Period, a total of 31 exhibitions were held in the Group's hall in Ho Chi Minh City (2005: 30), 21 in its hall in Colombo (2005: 18), and 50 in its hall in Chongqing.
Construction of the Xian Greenland Pico International Convention and Exhibition Centre in Xian, China is in progress. Besides taking a 30% stake in the venue, the Group also entered into a management contract with the venue owner.
Conference and Show Management
This segment, operating under the name of MP International Pte Limited ("MPI"), accounted for 2.1% (2005: 7.0%) of the Group's turnover. During the Period, the absence of the ITMA Asia (International Textile Machinery Association) show accounted for the reduction in turnover. However, MPI ventured into the Middle East market with the successful staging of the first Recycling and Recoverable Fibres conference in Dubai in September. Upcoming shows for MPI include the International Furniture Fair Singapore / 24th ASEAN Furniture Show, the Incentive Travel, Conventions and Meetings China 2007, the Integrated Systems China 2007 and the ITS Asia Pacific Forum 2008 in Singapore.
The sign advertising business accounted for 6.0% (2005: 5.4%) of the Group's turnover. This segment operates out of the Group's plant in Shanghai's Jiading district. During the Period, this factory was expanded to cover a gross area of 27,000 square meters with 10,000 square meters of shop floor area, twice the size of the old premises. During the Period, the Group served various renowned customers including Shanghai General Motors, Nissan, Sinochem-Total, McDonald's and Toyota. A significant achievement is a three-year contract awarded by Shell to provide signage for its corporate buildings and refinery plants across Europe, Asia, the Middle East and the U.S., with an estimated value of US$10 million per year. The Group also started to establish sales and marketing offices in the U.S. and EU to capitalize on the economies of scale and low-cost production facilities in China.
Museums, Theme Parks, and Interior Business
Museum, Theme Parks, and Interior business accounted for 5.6% (2005: 16.1%) of the Group turnover. During the Period, the Group has been slowly but steadily gaining worldwide recognition as a major provider for services under this segment. The main contribution to this segment include Singapore Changi Airport, Singapore's Philatelic Museum, National Library Board's Literacy Gallery in Singapore, Arts and Culture Hall for the eastern region at Phase II of Burapha University in Thailand, Ocean Park Jelly Fish Exhibit and the Ngong Ping Theme Village in Hong Kong, Venetian Macao in Macau, and D-Day Museum in Europe. The Group also provided interior fit-out services to various renowned brands such as Samsung, Nokia, Bacardi and Lccitane.
Sports and Games Events
Upon the success completion of the 2004 Athens Olympics and the annual meeting of the 117th International Olympic Committee in 2005, the Group started to accelerate the development of this segment during the Period. Coupled with the Group achievements in 2006, this segment looks poised to be one the fastest expanding businesses for the Group in upcoming years. Along with its joint venture companies in Italy and Australia, the Group was appointed as official provider for the Torino Winter Olympics and Paralympics 2006, and Melbourne Commonwealth Games 2006. The Group also secured and completed the 15th Asian Games in Doha in December, and will continue to seek more opportunities in forthcoming sporting events such as 2008 Olympics in Beijing, Euro Cup 2008 in Austria and Switzerland, the 2010 Commonwealth Games in New Delhi, and FIFA World Cup 2010 in South Africa.
Looking ahead, the Group expects its current growth to continue. Deliberate actions had been taken by the Group to prepare for future trends in the industry in order to retain its competitive foothold, from innovative business to strategic investments and partnerships in China and other parts of Asia. As a result, the outlook for 2007 is rosy because more investors are buying into the Las Vegas concept in Asia and more Asian countries are focusing on the MICE (Meeting, Incentive, Convention, Exhibition) market.
In view of the booming economic growth in Asia, especially in China, India, Singapore, and Macau, the Group will be benefit from enormous industrial opportunities. Thus, the Group aims to continue to improve its overall performance by focusing on profits and market share expansion. It will further enhance its global brand identity while maintaining its unwavering commitment to providing value-added services to its customers worldwide.
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