Modern Australian
Men's Weekly

.

Stella’s First-Half Net Profit Surges 54% and Cash Balance Doubles

Board Approves Plan to Return US$180 million to Shareholders over Three Years in Addition to Normal Dividend

Highlights:

  • Shipment volume increased by 12.3%, led by Sports category
  • Revenue increased by 7.5% to US$770.0 million
  • Further enhanced customer portfolio
  • Gross profit margin expanded by 2.7 percentage points to 25.8%
  • Reported operating profit margin increased to 12.9% from 9.0% same period last year
  • Adjusted net profit increased by 54.1% to US$92.9 million
  • Strong net cash position reached US$326.1 million, compared to US$162.5 million as at 30 June 2023
  • Declared interim dividend of HK65 cents per share, representing a dividend payout ratio of about 71.5% based on adjusted net profit
  • Board resolves to return additional cash up to US$180 million in total for the next three years (2024-2026) to shareholders through a combination of share repurchases and special dividends, on top of paying regular dividends with a payout ratio of 70%

HONG KONG SAR - Media OutReach Newswire - 22 August 2024 - Stella International Holdings Limited ("Stella" or the "Group"; SEHK: 1836), a leading developer and manufacturer of quality footwear and leather goods products, today announced its interim results for the six months ended 30 June 2024.

Enhanced Customer Mix Drives Margin Expansion

In the first half of 2024, the Group's revenue and shipment volumes increased year-on-year, driven by Sports category orders, as well as earlier shipments to certain customers, amounting to approximately 1 million pairs, compared to the original shipment plan. ASP decreased year-on-year, due to the higher proportion of Sports products which have a lower ASP.

The Group's non-Sports manufacturing facilities operated at close to full utilisation throughout the period under review. The Group saw continued gross profit margin improvement resulting from an enhanced customer mix. This, together with improved operating leverage from the increased utilisation of its Sports manufacturing facilities, drove an expansion of the Group's operating profit margin.

Due to the factors outlined above, the Group recorded a net profit of US$91.5 million. Excluding a marked-to-market net fair value change from its investment in Lanvin Group, the Group recorded an adjusted net profit of US$92.9 million (first half of 2023: US$60.3 million). Its adjusted net profit margin was 12.1% (first half of 2023: 8.4%).

Maintain Steady Payout Ratio of around 70%

After considering the Group's free cash flow situation, the Board has resolved to declare an interim dividend of HK65 cents per ordinary share for the six months ended 30 June 2024, representing a payout ratio of about 71.5%.

Board Approves Plans to Return US$180 million to Shareholders

Given the Group's strong cash levels, the Board has also resolved to return additional cash up to US$60 million per year for the next three years (2024-2026) to shareholders, not exceeding US$180 million in total, through a combination of share repurchases and special dividends, on top of paying regular dividends of with a normal payout of 70% (comprising of final dividends and interim dividends).

Gain Recognition for Excellence in Sustainability and Investor Relations

In the first half of 2024, the Group's MSCI ESG rating was upgraded to 'A' from 'B', reflecting its ongoing efforts to adopt better sustainability and transparency practices.

The Group was also named in the leading international financial magazine Institutional Investor's annual "Asia Executive Team Rankings" (Rest of Asia section – ex Japan and Mainland China) for the first time, earning the 'Honoured Company' designation in 2024. It ranked 3rd in the 'Best Company Board' (Sell-side) category and 6th (overall) in the Consumer Discretionary sector. In addition, it was one of the winners for the 'Best IR Company' (small-cap) award at the 10th Investor Relations Awards 2024 held by the Hong Kong Investor Relations Association.

Stella to unlock Global Opportunities with HSCI Inclusion and Stock Connect Trading

Hang Seng Indexes Company has announced that Stella International will become a constituent of the Hang Seng Composite Index ("HSCI") effective on 9 September 2024. From this date, the Group will also meet the requirements to become tradeable via the Stock Connect scheme.

Outlook: Maintain or Expand on Strong Margin Levels on Full-Year Basis

For the full year 2024, the Group expects to maintain or expand on the same strong operating margin level it achieved in 2023, as it continues to implement the strategies and meet the targets set out in its Three-Year Plan (2023-2025), namely achieving an operating margin of 10% and a low-teens annualised growth rate on profit after tax by the end of 2025.

The Group expects its non-Sports manufacturing facilities to continue operating at close to full utilisation in the second half of 2024, as it further enhances its product category mix as part of its Three-Year Plan. On a full-year basis, the Group expects shipment volumes to grow moderately compared to 2023, led by its Sports category

Mr. Chi Lo-Jen, Chief Executive Officer of the Group said, "As we seek to further improve our product mix, we are prioritising the ramp-up of our new factory in Solo, Indonesia, and improving worker skill levels in order to expand our capacity for higher-margin products and transition the production of some Fashion category products there from our factories in Vietnam. This will ensure that we continue meeting the profit growth targets of our Three-Year Plan."

Mr. Lawrence Chen, Chairman of the Group, said, "We will continue to enhance our customer mix, expand and diversify our manufacturing base, optimise management effectiveness and efficiency, and strengthen our use of working capital in order to deliver further growth and value to our shareholders."
Hashtag: #Stella

The issuer is solely responsible for the content of this announcement.

About Stella International Holdings Limited

Stella International (SEHK: 1836) is a leading developer and manufacturer of quality footwear and leather goods. A trusted partner to many of the world's most sought-after brands, it offers a unique proposition of unparalleled craftsmanship, production flexibility, and strong speed-to-market and commercialization capability, supported by a broad, diverse and proven manufacturing base across China and Southeast Asia.

Stella International was listed on the Hong Kong Stock Exchange in 2007 and is a constituent of the MSCI Hong Kong Small Cap Index.

The Science Behind Alarm Clocks and Your Circadian Rhythm

Waking up on time isn’t just about setting an alarm—it’s about working with your body, not against it. At the heart of every restful night and...

How to Use Plants to Create a Calming Atmosphere in Your Home

In today’s fast-paced world, cultivating a calm, soothing environment at home has never been more important. Whether you live in a busy urban apar...

How Maths Tutoring Can Help Students Master Maths

Mathematics can be a daunting subject for many students, often causing stress and frustration. However, maths tutoring has proven to be an effective...

Refurbished iPads Are Better Than New Ones (Here's Why)

Image by rawpixel.com on Freepik Apple's refurbished iPad program has quietly become one of the best deals in tech. While everyone obsesses over the ...

Your Guide to Finding the Right GP: What Perth City Doctors Offer Today

Choosing a General Practitioner (GP) is one of the most important health decisions you’ll make. Luckily, Perth’s vibrant CBD now hosts a new ge...

Why Every Mining Operation Needs a Robust Safety Management System

Mining is one of the backbones of the Australian economy, particularly in Western Australia. Back in 2019-20, mining contributed 10.4% of Australiaâ...

Australian Classic Literature Enjoys Resurgence

Welcome back to the good old days of storytelling! As the modern world becomes increasingly more demanding, returning to childhood favourites offers...

How to Choose the Right Lawyers in Sydney for Your Situation

When faced with a legal issue, selecting the right legal representation can make all the difference. Whether you're dealing with a personal injury, ...

Building a Governance Model for Headless Content Management at Scale

Image by pch.vector on Freepik There's never been a better time to implement a headless content management system (CMS) to gain the flexibility and ...

Understanding Trade Insurance: Essential Protection for Businesses

Image by Drazen Zigic on Freepik In the current economic environment, trade insurance is an important element for companies trading both locally an...

Choosing the Right Timber for External Cladding

Timber cladding is one of those finishes that pulls double duty: it makes a building look warm and welcoming, and it quietly shields the frame from ...

Top Services Offered by Diesel Mechanics in Brisbane

Keeping a diesel vehicle running at its best takes more than the occasional oil change. When you invest in regular specialist care, you protect the ...

Top 5 Benefits of Hiring Professional House Removalists

Moving day should feel like the start of a new adventure, not the end of your patience. Yet once the settlement papers are signed and the champagne ...

Navigating the Digital Landscape: Managed IT Solutions and IT Services in Townsville

As technology advances at an unprecedented pace, companies must adapt to embrace the transformation ahead. With an evolving technology landscape, mana...

Types of Catering You Should Consider for Your Next Event

Choosing the right type of catering service can elevate your event from ordinary to unforgettable. Whether it’s an elegant wedding, corporate func...

Understanding the Benefits of Split System Installation for Your Home

Climate control is essential to maintaining comfort in your home, especially during the extreme temperatures that many regions face. Whether you’r...

Best Aluminium Window Sliding Designs for Natural Light and Airflow

Bringing natural light and airflow into a space is one of the most efficient ways to create a healthy and comfortable home. In Sydney and across Aus...

Maximising Operational Efficiency: Electric Winch Hire Australia and Hydraulic Power Pack Hire Solutions

Image by jcomp on Freepik From urban construction sites and remote mining operations to coastal maritime facilities, specialised equipment solutio...