Convenience
Retail Asia Recorded Significant Growth
In Turnover and Profit for First Quarter 2001
A joint
venture agreement is reached with Shanghai Shen Hong Corporation and
China Foreign Trade Development Companies Inc.
for expansion into Southern China
Hong Kong,
26th April 2001 - Convenience Retail Asia Limited ("CRA"
or "the Group") [SEHK code: 8052] announced a net profit
of HK$11.3 million for the three months ended 31st March 2001, representing
a sharp increase of 136% over the same period last year (2000 1st
quarter: HK$4.8 million).
The Group's turnover
rose by 21% from HK$249 million recorded for the first quarter of
2000 to HK$301.9 million in 2001. Basic earnings per share were 1.8
HK cents, compared to 1.0 HK cent in first quarter 2000.
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 Mainland of China.
Dr. Victor K.
Fung, Chairman of CRA, said, "We are very pleased to report strong
growth for the Group despite a lackluster retail environment and conservative
consumer spending locally in the past quarter. The Group's encouraging
business performance, coupled with its successful listing on Hong
Kong's Growth Enterprise Market during the period, has set a good
start for us for the year."
Mr. Richard Yeung,
Chief Executive Officer of CRA, commented, "The significant increases
in both turnover and profit clearly demonstrate that our customer-driven
business model, and strategies of cost control and product pricing
have been successful and effective."
Excellence in
customer services, aggressive promotions, and value pricing have helped
to attract more customers to Circle K stores. Through better cost
control and product pricing, the Group was able to increase gross
margin and other income (excluding interest income) as a percentage
of sales by 1.9% during the quarter. Stronger store sales combined
with higher gross margin and other income helped boost the Group's
net profit by a significant level.
At today's press
conference, CRA also announced that it had reached an agreement to
set up a joint venture - Convenience Retail Southern China Limited
("CRSC"). This joint venture will be responsible for leading
the expansion of the Circle K network in the Southern part of China.
CRSC is 62.5%-owned by the Group, whereas Shanghai Shen Hong Corporation
("Shen Hong") and China Foreign Trade Development Companies
Inc. ("CFTDC") own the remaining 35% and 2.5% respectively.
Commenting on
the joint venture, Mr. Richard Yeung said, "We feel very privileged
to have Shen Hong and CFTDC as our China partners. CRSC will leverage
the solid business experience of Shen Hong and its parent company
Shanghai Friendship Group, and will also benefit from Guangdong-based
CFTDC's extensive knowledge in business development."
Application of
a PRC business license is in progress. Subject to approval from the
respective authorities, the Group will start operations in Guangzhou.
While the Group
continues with its aggressive expansion plan in Hong Kong, growth
in profit will slow down, as expected, to a moderate rate due to the
uncertainty of the retail environment in Hong Kong. It is also anticipated
that the Group shall incur start up costs from new operations in the
Mainland of China.
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 126 company owned-and-managed
stores in Hong Kong as of 31st March 2001. Major initiatives are planned
for expansion into the southern part of the Mainland of China.
About Shen
Hong
Shanghai Shen Hong Corporation is majority-owned by Shanghai Friendship
Group, which is primarily engaged in the operation of Shanghai Lian
Hua Supermarket and Shanghai Friendship Department Store.
About CFTDC
China Foreign Trade Development Companies Inc. is a state-owned enterprise
in Guangdong Province, the PRC. It serves as a multi-function business
entity to facilitate import and export, logistics, and provide trade-related
services.
For more information,
please contact:
Scotchbrook-BSMG
Worldwide(Hong Kong)
|
Telephone:
|
2877 3939
|
Fannie Mok
|
Direct line:
|
2863 9119
|
Ken Walker
|
Direct line:
|
2863 9168
|
CRA corporate
website: www.cr-asia.com |