Vitasoy International (0345) H2 2015 earnings summary

Executive summary

• FY2014/15 net sales rose 12%; gross profit increased 15% and profit attributable to shareholders grew 21%, driven by core soy and tea categories and Mainland China and Hong Kong.

• Growth accelerated from 11% in the prior year and 9% the year before; management said full-year results were in line with its target.

• Growth strategy centered on execution, expansion and innovation, with profit growth outpacing faster revenue growth.

Financial highlights

• Net sales rose 12% to HKD 5.1bn; gross profit increased 15% to HKD 2.5bn.

• EBITDA increased 11% to HKD 725m; profit before tax rose 15% to HKD 524m.

• Profit attributable to equity shareholders grew 21% to HKD 372m; basic EPS increased 20% to HKD 0.359.

• Higher gross profit was partly offset by increased marketing investment, volume-driven commissions, staff costs, transportation and warehousing expenses.

Outlook and guidance

• Continue execution, geographic and channel expansion, and product and packaging innovation to grow core markets and categories.

• Mainland China plans focused on core portfolio, VITASOY VITALITY and increasing consumer trial; US priorities include Asian-channel expansion, mainstream improvement and innovation.

• Australia plans to scale its expanded plant-milk offering; Singapore plans to grow VITASOY tofu and link it with ambient beverages.

• Gearing was expected to rise as bank loans were progressively taken up to support capacity expansion.