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VTech HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
INTERIM RESULTS ANNOUNCEMENT
FOR THE SIX MONTHS ENDED 30TH SEPTEMBER, 2000
 
PERFORMANCE HIGHLIGHTS
  • Group turnover increased by 36% to US$708.6 million.
  • Profit attributable to shareholders was US$0.8 million.
  • Sales of consumer telephone products climbed 64% to US$441.1 million.
  • Sales of electronic learning products fell 15% to US$160.4 million owing to component shortages and the prevailing weakness of the euro.
  • New businesses have strong potential for growth.
UNAUDITED INTERIM RESULTS
The directors of VTech Holdings Limited announce the unaudited results of the company and its subsidiary and associated companies for the six months ended 30th September, 2000 together with the comparative figures for the same period last year as follows:
 
  CONDENSED Consolidated Income Statement

(Unaudited)

(Audited)
Year ended

Six months ended 30th September

31st March, 2000
US$'M

  Note 2000
US$'M		 1999
US$'M
 

1,045.9

Turnover   1 708.6 520.8

(723.2)


Cost of sales (524.5) (367.1)

322.7

Gross profit

184.1

153.7

(179.7)

Distribution cost (118.7)

(84.5)

(53.9) Administrative and other expenses (27.3) (20.9)
(42.7) Research and development expenses (28.8) (23.2)

46.4

Operating profit   2

9.3

25.1

1.3

Net finance (expense)/income   3 (5.8)
1.2

(0.1)

Share of results of associates (0.1) -

47.6

Profit before taxation

3.4

26.3

(2.5)

Taxation   4 (2.5)

0.3

   

45.1

Profit after taxation 0.9

26.6

(0.1)

Minority interests  

(0.1)

(0.2)

 

45.0

 

0.8

26.4

   

     

Earnings per share (in US cents)   5  

20.5

- Basic

0.3

12.1

20.4

- Diluted

0.3

12.0


 

17.5

Dividends per share ( in US cents) -

5.0

 
      CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

(Audited)

Six months ended 30th September

31st March

2000

1999

2000

US$'M

US$'M

US$'M

Non-current assets  

172.8

Tangible assets

166.9

109.1

(32.2)

Intangible assets

23.5

-

4.3

Deferred tax assets

3.2

7.8

1.8

Investments

0.6

2.0

146.7

194.2

118.9

Current assets  

256.8

Stocks

301.5

180.2

244.5

Debtors and prepayments 6

354.4

255.9

3.1

Taxation recoverable

2.9

0.7

79.6

Cash at bank and deposits

27.6

36.8

584.0

686.4

473.6

 
   
 
Current liabilities          
(242.4)
Creditors and provisions   7 (361.2) (267.3)

(16.2)

Borrowings (69.5) (24.3)

(3.4)

Current tax liabilities (2.6) (2.7)

(262.0)

(433.3)

(294.3)
   
322.0
 Net current assets

253.1

179.3
   
  Long-term liabilities  
(169.7)
 Borrowings

(148.3)

(11.9)
(1.4)
 Deferred tax liabilities

(1.4)

(1.9)
(171.1)

(149.7)

(13.8)
 

297.6

284.4
 
297.6
 Net operating assets  
   
10.7
 Share capital

11.2

10.6
286.1
 Reserves 9

285.4

272.9
296.8
 Shareholders' funds

296.6

283.5
0.8
 Minority interests

1.0

0.9
297.6
 Capital employed

297.6

284.4


 
 
  NOTES TO THE FINANCIAL STATEMENTS
                     
1. SEGMENT INFORMATION                  
 

The group's operations comprise two main business segments, telecommunication and electronic products and e-Business related services. Telecommunication and electronic products include the design, manufacture and distribution of telephones, electronic learning, information appliances, interactive set top boxes and other electronic products. e-Business related services include the design, manufacture and distribution of web services, learning web, a global positioning system and other e-Business related activities.
                     
  Turnover represents the amounts received and receivable for sale of goods to third parties.
                     
  Primary reporting format - business segments            
        Six months ended 30 September
        Turnover   Operating Profit
        2000   1999   2000   1999
       

US$'M

  US$'M  

US$'M

  US$'M
  Telecommunication and electronic products

708.4

  519.8  

17.9

  29.2
  e-Business related services  

0.2

  1.0  

(7.8)

  (3.5)
  Unallocated            

(0.8)

  (0.6)
       
 
 
 
       

708.6

  520.8  

9.3

  25.1
       
 
 
 
   
 

The design, manufacture and distribution of interactive set top boxes has been reclassified and included under the "Telecommunication and electronic products" segment instead of the "e-Business related services" segment as shown in the annual financial statements for the year ended 31st March 2000 as the directors believe this is a fairer classification of the nature of those activities.
                     
  Secondary reporting format - geographical segments            
                     
        Six months ended 30 September
        Turnover   Operating Profit
        2000   1999   2000   1999
       

US$'M

  US$'M  

US$'M

  US$'M
  USA    

575.7

  392.0  

4.0

  15.0
  Europe    

78.5

  82.7  

0.7

  6.4
  Asia Pacific    

19.0

  15.4  

1.2

  (0.8)
  Others    

35.4

  30.7  

3.4

  4.5
       
 
 
 
       

708.6

  520.8  

9.3

  25.1
       
 
 
 
                     
2. OPERATING PROFIT                
                     
  The following items have been charged/(credited) in arriving at operating profit:
                6 months ended 30 Sept.
                2000   1999
               

US$'M

  US$'M
               

   
               

   
  Recognition of negative goodwill (Note)      

(30.8)

  -
  Depreciation            

21.8

  16.9
  Loss on disposal of fixed assets      

0.7

  0.2
  Amortisation of negative goodwill      

(0.2)

   
               
 
                     
  Note:                  
 

Negative goodwill of US$30 million has been recognised as income to offset distribution costs in the amount of US$16.1 million, administrative and other operating expenses in the amount of US$10.7 million and research and development expenses in the amount of US$3.2 million.
                     
                     
3. NET FINANCE EXPENSE/(INCOME)            
                     
  Interest expense            

7.6

  1.0
  Interest income            

(1.8)

  (2.2)
               
 
               

5.8

  (1.2)
               
 
                     
                     
4. TAXATION                  
                     
  Current tax            

1.4

  1.5
  Underprovision in prior years            

-

  0.4
  Deferred tax            

1.1

  (2.2)
               
 
               

2.5

  (0.3)