Convenience Retail Asia Reports Strong Growth in Profitability for Year 2000

Owner and Operator of Circle K Stores in Hong Kong Cites
Attractive Pricing, Customer Service, and Appealing Promotions
as its Keys to Success

Hong Kong, 14th March 2001 - Convenience Retail Asia Limited ("CRA" or "the Group") [SEHK code: 8052] announced a profit attributable to shareholders of HK$48.1 million for the year ended 31st December 2000, representing an increase of 629% over last year (1999: HK$6.6 million). The Group's turnover rose by 17% from HK$972.9 million in 1999 to HK$1,140.7 million in 2000.

Basic earnings per share were 9.8 HK cents, compared to 1.3 HK cents in the previous year. The Group will not pay a final dividend.

CRA is a subsidiary of privately held Li & Fung (Retailing) Limited and the licensee of the Circle K convenience store brand in Hong Kong and for most of the Chinese Mainland.

Dr. Victor K. Fung, Chairman of CRA, said, "2000 was a year of excitements for the Group followed by the successful listing of its shares on Hong Kong's Growth Enterprise Market in January this year. We feel much encouraged by the Group's remarkable business performance especially since it was achieved in a period of slow growth in the general retail environment and conservative consumer spending in Hong Kong."

Mr. Richard Yeung, Chief Executive Officer of CRA, attributed the strong growth to the success of a customer-driven business model that focuses on strong core competencies and service excellence. "Customers respond favourably to the Group's pricing policy, appealing promotions and excellent customer service. As a result, customer traffic increased significantly during 2000," Mr. Yeung said.

During the year, store productivity improved and store operating expenses as a percentage of sales dropped by 2.4%, primarily due to an integrated electronic point of sales and supply chain system. Gross margin and other income as a percentage of sales also increased. These factors together contributed to a very significant increase in the Group's net profit.

In addition to achieving strong financial results, the Group embarked on major initiatives to build the Circle K brand as the preferred brand in convenience retailing in Hong Kong. During 2001, new initiatives will be introduced to further build the brand and broaden Circle K's base of loyal customers.

Looking ahead, Mr. Yeung noted that the expanding urban population, faster pace of life, and increasing spending power will fuel the demand for convenience retailing in Hong Kong and the Mainland of China dramatically in the coming years. CRA has developed a 2001-2003 business plan to focus on growth in these two markets, which also takes into account China's imminent entry into the WTO.

"We are confident that CRA will continue to capitalise on its solid convenience retailing experience and proven business model to take advantage of the enormous business opportunities," Mr. Yeung concluded.

About CRA

Convenience Retail Asia is engaged in the operation of one of the leading convenience store chains in Hong Kong under the brand name of Circle K. The Circle K store chain comprises 123 company owned-and-managed stores in Hong Kong as of 31st December 2000. Major initiatives are planned for the expansion into the southern part of the Mainland of China in the third quarter of 2001.


About Li & Fung

Li & Fung (Retailing) Limited, the holding company of Convenience Retail Asia, was formed in 1985 as a company wholly-owned by Li & Fung (1937) Limited. There are three other chains within the retailing group: Toys "R" Us, Fotomax and Fun Fun World. The retailing group's business extends from Hong Kong to Taiwan, Singapore, and Malaysia, with plans for expansion into China and other Asian countries.

For more information, please contact:

Scotchbrook-BSMG Worldwide (Hong Kong) Limited Telephone: 2877 3939

Fannie Mok Direct line: 2863 9119

Prudence Lai Direct line: 2863 9120

CRA corporate website: www.cr-asia.com

Convenience Retail Asia Limited

Consolidated Profit & Loss Account

Year ended 31st December

2000
HK$ '000

1999
HK$ '000
Turnover
1,140,671
972,921
Cost of sales
(856,611)
(736,290)
Gross profit
284,060
236,631
Other revenues
71,621
59,371
Store expenses
(249,956)
(236,055)
Distribution costs
(17,390)
(12,214)
Administrative expenses
(36,921)
(32,150)
Other operating income
480
-   
Operating profit
51,894
15,583
Finance costs
(4,106)
(8,980)
Profit for the year
47,788
6,603
Minority interests
331
- 
Profit attributable to shareholders
48,119
6,603
Basic earnings per share
9.8 cents
1.3 cents

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