VTech Holdings Ltd, the Hong Kong-based consumer electronics conglomerate, has optimised its profit potential this year. For while turnover slid 5.8% to $532.2m, it reported net profit up 45.9% at $12.4m for the year to March 31. Indeed profits were even more impressive but for abnormal charges incurred in its operating costs as it scaled down its US personal computer presence: $7.4m was written off for doubtful debts and inventory provisions in its discontinued distribution operations in the US and $2.6m from the disposal of excess warehousing. The liquidation of its European distribution centres contributed a further $5.4m to its costs. The company highlighted its 30% growth in sales of electronic toys and games and 61% in telecommunication products area, with particular success in the cordless telephone market in the US. VTech feels vindicated in its decision to focus on the Asia Pacific markets, particularly China, as sales grew 26%, while it continued to expand its manufacturing presence there. The dividend is one cent.
