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VTech Holdings Limited
(Incorporated in Bermuda with limited liability)
(Stock code: 303)
ANNUAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2019
PERFORMANCE HIGHLIGHTS
Group revenue increased by 1.5% to US$2,161.9 million
Profit attributable to shareholders of the Company decreased by 17.0% to US$171.3 million
Final dividend of US50.0 cents per ordinary share, resulting in a full-year dividend of US67.0 cents per ordinary share, a decrease of 16.3% year-on-year
Gross margin declined from 33.0% to 29.4%
Restructuring to turn around TEL products business
The directors (the "Directors") of VTech Holdings Limited (the "Company") announce the audited results of the Company and its subsidiaries (the "Group") for the year ended 31 March 2019 together with the comparative figures for the previous year as follows:
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 31 March 2019
2019 | 2018 | ||
Note | US$ million | US$ million | |
Revenue | 2 | 2,161.9 | 2,130.1 |
Cost of sales | (1,525.5) | (1,428.1) | |
Gross profit | 636.4 | 702.0 | |
Other income | 3 | 5.9 | 4.2 |
Selling and distribution costs | (294.0) | (318.9) | |
Administrative and other operating expenses | (77.9) | (78.4) | |
Research and development expenses | (77.2) | (77.6) | |
Operating profit | 2&3 | 193.2 | 231.3 |
Net finance expense | (0.9) | (0.3) | |
Profit before taxation | 192.3 | 231.0 | |
Taxation | 4 | (21.0) | (24.7) |
Profit for the year and attributable to shareholders | |||
of the Company | 171.3 | 206.3 | |
Earnings per share (US cents) | 6 | ||
- Basic | 68.2 | 82.1 | |
- Diluted | 68.1 | 82.1 | |
VTech Holdings Limited | 1 | 2018/2019 Annual Results |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 31 March 2019
2019 | 2018 | |
US$ million | US$ million | |
Profit for the year | 171.3 | 206.3 |
Other comprehensive income for the year | ||
Item that will not be reclassified to profit or loss: | ||
Effect of remeasurement of net assets on defined benefit | ||
scheme, net of deferred tax | 0.2 | 5.0 |
0.2 | 5.0 | |
Items that may be reclassified subsequently to profit or loss: | ||
Fair value gains / (losses) on hedging, net of deferred tax | 5.9 | (4.5) |
Realisation of hedging reserve, net of deferred tax | 3.5 | (4.7) |
Exchange translation differences | (20.4) | 32.7 |
(11.0) | 23.5 | |
Other comprehensive income for the year | (10.8) | 28.5 |
Total comprehensive income for the year | 160.5 | 234.8 |
VTech Holdings Limited | 2 | 2018/2019 Annual Results |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2019
2019 | 2018 | ||
Note | US$ million | US$ million | |
Non-current assets | |||
Tangible assets | 84.3 | 76.2 | |
Leasehold land payments | 4.5 | 4.8 | |
Intangible assets | 18.6 | 19.6 | |
Investments | 5.4 | 5.4 | |
Goodwill | 36.1 | 31.1 | |
Net assets on defined benefit scheme | 2.6 | 2.7 | |
Deferred tax assets | 5.8 | 6.3 | |
157.3 | 146.1 | ||
Current assets | |||
Stocks | 369.9 | 349.9 | |
Debtors, deposits and prepayments | 7 | 319.1 | 348.0 |
Taxation recoverable | 3.6 | 1.6 | |
Deposits and cash | 237.0 | 254.4 | |
929.6 | 953.9 | ||
Non-current asset held for sale | - | 2.7 | |
929.6 | 956.6 | ||
Current liabilities | |||
Creditors and accruals | 8 | (443.9) | (416.7) |
Provisions for defective goods returns and other liabilities | (24.9) | (28.4) | |
Taxation payable | (7.7) | (8.0) | |
(476.5) | (453.1) | ||
Net current assets | 453.1 | 503.5 | |
Total assets less current liabilities | 610.4 | 649.6 | |
Non-current liability | |||
Deferred tax liabilities | (3.4) | (3.0) | |
(3.4) | (3.0) | ||
Net assets | 607.0 | 646.6 | |
Capital and reserves | |||
Share capital | 12.6 | 12.6 | |
Reserves | 594.4 | 634.0 | |
Total equity | 607.0 | 646.6 |
VTech Holdings Limited | 3 | 2018/2019 Annual Results |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2019
Attributable to shareholders of the Company | ||||||||
Shares held | ||||||||
for Share | ||||||||
Share | Share | Purchase | Exchange | Hedging | Revenue | Total | ||
capital | premium | Scheme | reserve | reserve | reserve | equity | ||
US$ | US$ | US$ | US$ | US$ | US$ | US$ | ||
Note | million | million | million | million | million | million | million | |
At 1 April 2017 | 12.5 | 148.8 | (0.2) | (33.8) | 5.2 | 452.2 | 584.7 | |
Changes in equity for the year ended | ||||||||
31 March 2018 | ||||||||
Comprehensive income | ||||||||
Profit for the year | - | - | - | - | - | 206.3 | 206.3 | |
Other comprehensive income | ||||||||
Fair value losses on hedging, net of deferred tax | - | - | - | - | (4.5) | - | (4.5) | |
Realisation of hedging reserve, net of deferred tax | - | - | - | - | (4.7) | - | (4.7) | |
Exchange translation differences | - | - | - | 32.7 | - | - | 32.7 | |
Effect of remeasurement of net assets on defined | ||||||||
benefit scheme, net of deferred tax | - | - | - | - | - | 5.0 | 5.0 | |
Other comprehensive income for the year | - | - | - | 32.7 | (9.2) | 5.0 | 28.5 | |
Total comprehensive income for the year | - | - | - | 32.7 | (9.2) | 211.3 | 234.8 | |
Final dividend in respect of the previous year | - | - | - | - | - | (133.2) | (133.2) | |
Interim dividend in respect of the current year | 5 | - | - | - | - | - | (42.8) | (42.8) |
Shares issued under Share Purchase Scheme | 0.1 | 3.0 | (3.1) | - | - | - | - | |
Shares purchased for Share Purchase Scheme | - | - | (4.0) | - | - | - | (4.0) | |
Vesting of shares of Share Purchase Scheme | - | - | 7.1 | - | - | - | 7.1 | |
At 31 March 2018 / 1 April 2018 | 12.6 | 151.8 | (0.2) | (1.1) | (4.0) | 487.5 | 646.6 | |
Changes in equity for the year ended | ||||||||
31 March 2019 | ||||||||
Comprehensive income | ||||||||
Profit for the year | - | - | - | - | - | 171.3 | 171.3 | |
Other comprehensive income | ||||||||
Fair value gains on hedging, net of deferred tax | - | - | - | - | 5.9 | - | 5.9 | |
Realisation of hedging reserve, net of deferred tax | - | - | - | - | 3.5 | - | 3.5 | |
Exchange translation differences | - | - | - | (20.4) | - | - | (20.4) | |
Effect of remeasurement of net assets on defined | ||||||||
benefit scheme, net of deferred tax | - | - | - | - | - | 0.2 | 0.2 | |
Other comprehensive income for the year | - | - | - | (20.4) | 9.4 | 0.2 | (10.8) | |
Total comprehensive income for the year | - | - | - | (20.4) | 9.4 | 171.5 | 160.5 | |
Final dividend in respect of the previous year | 5 | - | - | - | - | - | (158.5) | (158.5) |
Interim dividend in respect of the current year | 5 | - | - | - | - | - | (42.8) | (42.8) |
Shares issued under Share Purchase Scheme | - | 2.5 | (2.5) | - | - | - | - | |
Shares purchased for Share Purchase Scheme | - | - | (3.4) | - | - | - | (3.4) | |
Vesting of shares of Share Purchase Scheme | - | - | 4.6 | - | - | - | 4.6 | |
At 31 March 2019 | 12.6 | 154.3 | (1.5) | (21.5) | 5.4 | 457.7 | 607.0 |
VTech Holdings Limited | 4 | 2018/2019 Annual Results |
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2019
2019 | 2018 | ||
Note | US$ million | US$ million | |
Operating activities | |||
Operating profit | 193.2 | 231.3 | |
Depreciation of tangible assets | 3 | 36.9 | 35.0 |
Amortisation of leasehold land payments | 3 | 0.1 | 0.2 |
Amortisation of intangible assets | 3 | 1.0 | 0.9 |
Gain on disposal of an investment | 3 | - | (4.2) |
(Gain) / loss on disposal of tangible assets and | |||
non-current asset held for sale | 3 | (5.9) | 0.5 |
Share-based payment expenses | 4.6 | 7.1 | |
Increase in stocks | (17.4) | (25.0) | |
Decrease / (increase) in debtors, deposits and prepayments | 30.9 | (24.0) | |
Increase / (decrease) in creditors and accruals | 33.3 | (14.0) | |
Decrease in provisions for defective goods returns | |||
and other liabilities | (3.5) | (6.5) | |
Decrease in net assets on defined benefit scheme | 0.2 | 0.3 | |
Cash generated from operations | 273.4 | 201.6 | |
Interest paid | (0.9) | (0.3) | |
Taxes paid | (23.2) | (25.6) | |
Net cash generated from operating activities | 249.3 | 175.7 | |
Investing activities | |||
Purchase of tangible assets | (37.3) | (37.6) | |
Proceeds from disposal of tangible assets and | |||
non-current asset held for sale | 9.2 | 0.2 | |
Proceeds from disposal of an investment | - | 4.3 | |
Payment for acquisition of an investment | - | (2.4) | |
Payment for acquisition of a subsidiary | |||
(net of cash and cash equivalents acquired) | (17.8) | - | |
Net cash used in investing activities | (45.9) | (35.5) | |
Financing activities | |||
Repayment of bank loans arising from acquisition of Snom | - | (1.7) | |
Payment for shares acquired for Share Purchase Scheme | (3.4) | (4.0) | |
Dividends paid | 5 | (201.3) | (176.0) |
Net cash used in financing activities | (204.7) | (181.7) | |
Effect of exchange rate changes | (16.1) | 27.1 | |
Decrease in cash and cash equivalents | (17.4) | (14.4) | |
Cash and cash equivalents at 1 April | 254.4 | 268.8 | |
Cash and cash equivalents at 31 March | 237.0 | 254.4 |
VTech Holdings Limited | 5 | 2018/2019 Annual Results |
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