LONDON (Alliance News) - Jiasen International Holdings Ltd Thursday reported a drop in pretax profit in 2014 due to margin pressure as a result of buying more expensive materials to make its wooden doors amid a push to secure business that is meant to appeal to more affluent customers.
In a statement, Jiasen said it made a CNY214.4 million pretax profit in 2014, compared with a CNY236.1 million in the prior year. Revenue increased to CNY870.9 million from CNY782.8 million but margin pressure, higher selling and distribution expenses, as well as an increase in administrative expenses, all contributed to the fall in pretax profit.
The increase in revenue was due to wholesale distribution and property-developer projects, according to Jiasen, accounting for about 87% of the total recorded. The company also moved to explain the decrease in margins achieved on revenue.
"As previously indicated, in order to secure larger and more luxurious property projects, the group has had to offer more competitive pricing and increase the quality of its furniture, fixtures and fittings," Jiasen said.
The company also said that it has had a "positive start" to 2015, citing a "strong" order book. It is also working to increase its brand presence and diversify so that it is less reliant on revenue from making doors and related products. According to the company's results, doors generated 28.2% of revenue in 2014, compared with 50.5% in 2013.
Jiasen said it will pay a final dividend of 2.35 pence for 2014. It paid an interim dividend of 1.50p per share in September 2014.
Jiasen shares were up 35% at 33.00p on Thursday morning, giving it a market capitalisation of GBP38.8 million.
The company, which is based in the south east of China and makes products such as wooden doors, listed on London's AIM in July 2014 with a market capitalisation of GBP99.8 million after raising GBP2.33 million by issuing 2.8 million new shares at 82p each to investors.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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