Sourcing group Li & Fung has announced core operating profit increase and a reduction in costs at the end of the first year in its three-year turnaround plan.
For the year to 31 December core operating profit, excluding the impact of the divestment of three product verticals and the Asia consumer and healthcare distribution business, increased by 13.3% to $356m (£251m).
Total margin as a percentage of turnover increased from 9.9% to 10.2%. Operating costs fell by 5.8% compared to 2016. However, turnover fell 4.6% to $13.5bn (£9.5bn).
Li & Fung Group CEO, Spencer Fung, welcomed the results as an indication that the company is on course to meet its financial and strategic goals, with customers responding well to its digital supply chain model and speed of service.
He added: “At the same time, our logistics business, which completes our end-to-end supply chain solutions, continues to grow, driven by e-logistics, deeper penetration of our core customers supported by cross-selling with our supply chain solutions business and entry to new markets such as India and Vietnam.”
Group chairman William Fung said: “Our strategy to further simplify the business and focus on our core supply chain solutions business is in turn helping our customers to revamp their business model and counter disruptions in other markets. We are on track to deliver a fully integrated digital platform that connects our suppliers and customers with end-to-end visibility to enhance decision making.”
The firm’s board of directors has proposed a final dividend of 2 HK cents and a declared conditional special dividend of 47.6 HK cents per share, contributing to a full-year dividend of 60.6 HK cents per share.
Li&Fung’s three year plan focuses on speed, innovation and digitisation.