Consumer goods exporter Li & Fung has seen its first-half net profit rise 18% to HK$1.24bn, from HK$1.05bn last year, helped by strong organic growth and contributions from acquisitions. Revenue for the half rose 25% to HK$47.4bn, while core operating profits rose 30% to HK$1.53bn.

The US market accounted for 60% of the revenue in the half, down from 68% last year. Its European operations accounted for 31% of revenue, up from 23% last year, due to the contribution from Tommy Hilfiger's European business. It also noted that sales to have increased by as much as 40% so far this year.

Li & Fung, which sources products for major global retailers, also said it has agreed to acquire 100% of Van Zeeland Inc., a US-based importer of handbags, for HK$2.57bn (US$329.1m). The company said it will continue to seek acquisition targets in the US to expand its existing businesses. MD William Fung noted, "We see many acquisition opportunities with attractive purchase prices given weak macroeconomics conditions in the US". In 2007, Li & Fung invested over US$750m in acquisitions, including the global sourcing operations of Tommy Hilfiger.

Li & Fung said it is on track to increase its core operating profit to US$1.0bn by end-2010.

NamNews - Thursday 14th August 2008

 

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