LONDON (Alliance News) - Jiasen International Holdings Ltd on Thursday said its pretax profit more than halved in 2015, on the back of a decline in revenue coming from a slowdown in China, which hit consumer confidence and demand in the property market.
The Chinese property fit-out company said its pretax profit came in at CNY77.9 million for 2015, compared to the CNY214.4 million reported a year earlier, which included a provision against bad debts of CNY52.3 million.
Revenue fell to CNY639.2 million during the year, down 27% from the CNY870.9 million posted for 2014, which it said reflected a slowdown in sales for its multiple wooden products and reduced demand for high-end housing decorations and semi-furnished homes.
Diversification away from non-door products to mitigate market margin erosion seen with bulk door supply has continued to be a core focus, Jiasen said, and during the year, furniture and fittings accounted for 67.7% of revenue whilst doors contributed 20.4% of group revenue. A year earlier, these figures had stood at 60.2$% and 28.2% respectively.
Jiasen said, following the review of its dividend policy, announced at its interim results, the board has decided to suspend dividend payments in light of the "difficult trading environment".
Trading in the first five months of 2016 had "continued to be challenging", Jiasen said, and expects trading conditions to remain challenging over the short to medium term, particularly for the property segment. Jiasen said it will continue to scale back its property segment, which took place in the last three months of 2015, which it said was a bid to mitigate the risk of bad debt.
"It has been a very challenging time for the Chinese property market as the economy has slowed. The group has seen consumer confidence impacted as a result and this is effecting our revenue. Jiasen is taking mitigating actions to ensure that we are protected both now and in the short to medium term by diversifying our revenue mix, reviewing the purchase of land for our new factory, and suspending dividend payments," said Chairman Weigang Chen.
Shares in Jiasen were down 13% at 3.37 pence on Thursday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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