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VTech Holdings Ltd. announced its results for the year ended 31st March 2007, reporting record revenue and its second successive year of record profit. Revenue for the Group increased by 21.5% over the financial year 2006 to US$ 1,463.8 million. “All three of our businesses recorded revenue increases during the financial year 2007. The record results demonstrate that we are reaping the benefit of the hard work put in to enhance our operations and build a solid foundation for growth,” said Mr. Allan Wong, Chairman and Group CEO of VTech Holdings Limited. Across the Board Growth at ELP Business The ELP business (Electronic Learning Products) achieved record revenue in the financial year 2007, which increased by 26.2% as compared with the financial year 2006 to US$ 570.1 million. This was equivalent to 39.0% of total Group revenue, as compared with 37.5% in the previous financial year. The growth came across the board, with good performances from all product ranges. The traditional ELPs recorded higher sales growth than the V.Smile range, mainly driven by increased shelf space and an expanded product portfolio. Revenue increases were apparent in all markets, with particularly strong growth in North America as V.Tech continued to gain shelf space in this market. Sales from the region rose by 29.2% to US$ 260.9 million and V.Tech maintained its leadership position in its principal markets. In the financial year 2007, the V.Smile range entered its third year of sales. Sales of the basic console and software met management expectations. In addition to the basic V.Smile, the range was extended through the introduction of the V.Smile Baby Infant Development System™ (V. Smile Baby), aimed at children from nine month to three years old and the V.Flash Home Edutainment System ™ (V.Flash), which targets those aged six and up. Countering Cost Pressures All three businesses did well to counter cost pressures during the financial year 2007, despite high material prices, rising labour cost and overheads in China, following the appreciation of the Renminbi. Greater economies of scale and efficiency gains mitigated these pressures. Outlook The rise in our production volumes has begun to put pressure on capacity and to ease capacity constraints and realise further economies of scale, the Group is adding manufacturing facilities. Building on its strong position in Europe and increasing market share in North America, the ELP business is expected to continue to grow. The Whiz Kid Learning System ™ will enable V.Tech to capture position in the reading market. The V.Smile range will continue to evolve through an enhanced V.Smile console that will hit the shelves in August 2007, as well as smaller and lighter version of V.Smile Pocket. The library of cartridges will expand further. “The succession of good results achieved in recent years testifies to VTech’s ability to develop sound business strategies and execute them well. I believe we have developed a solid foundation for future expansion,” said Mr. Wong. |
