Business

Thursday October 15, 2009

Top Glove sees profit surge


Higher global glove demand expected to drive revenue to double-digit growth

KUALA LUMPUR: Top Glove Corp Bhd, the world’s largest glove manufacturer, expects double-digit growth in profit and revenue in the financial year ending Aug 31, 2010 (FY10), as the global glove demand is expected to grow 8% to 10% this year and next.

Last week, the company reported a 121% increase in net profit for the fourth quarter ended Aug 31 to RM56.8mil, or 19.18 sen per share, compared with the previous corresponding quarter.

Tan Sri Lim Wee Chai says the company currently has 33% to 34% foreign ownership

Its revenue in the quarter increased to RM427.4mil from RM364.5mil previously. For the full year (FY09), Top Glove’s revenue was up 11% at RM1.53bil while net profit increased to RM169.2mil from RM110.1mil in FY08.

Executive director K.M. Lee said the company was also targeting to increase its global market share to 30% by December 2012 from the current 22% by merger and acquisition (M&A) acvitities and also through organic growth (building more factories).

“We have ample cash in hand now (RM176mil) for M&A plans and are now looking for suitable companies locally and internationally to acquire,” he told a briefing yesterday.

Lee said the company would try to maintain its double dividend payout ratio but, to do this, it needed to make sure that the targets were met.

“Our target dividend payout ratio is around 30% of profit attributable to equity – in FY09, our ratio was 39.3%,” he said.

The company has recommended a special dividend of six sen a share in addition to the final dividend of nine sen, bringing the total dividend for FY09, including interim dividend of seven sen, to 22 sen per share. This was double the 11 sen the company paid in FY08.

When asked about the current percentage of international shareholding, chairman Tan Sri Lim Wee Chai said the company currently had 33% to 34% foreign ownership.

“It is not easy to attract them (foreigners) to invest in a company without showing good results and we have proven to them with our consistency to deliver to their expectation.”


TOPGLOV : [Stock Watch] [News]


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