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Unforgettable profit for memory group

  • 12 September, 2006 12:17

<p>Adelaide - September 11, 2006 - Multinational manufacturer of memory-based and IT electronic components, Legend Corporation Ltd, boosted net profit 71.8% to a record $6.7 million in the year to June 30, 2006.</p>
<p>The record result compares with $3.9 million previously. Annual dividend is a steady 3c a share.</p>
<p>Legend managing director, Bradley Dowe, said he was delighted to have again exceeded the company’s earnings guidance to the market, which had been $6.6 million.</p>
<p>“Our strategy is to continue to focus our product mix on improving margins rather than solely on high rates of revenue growth,” Mr Dowe said.</p>
<p>“This will produce positive cash flows as increased earnings are generated from the existing working capital base.</p>
<p>“The 2007 financial year will see strong growth across the Legend business and in particular continuing high rates of growth in Asia and consumer electronics products.”</p>
<p>Revenue for the Adelaide and Singapore-based manufacturer was up 13.4% from $177 million to $201 million.</p>
<p>The revenue from flash media and flash based products increased from $18.4 million to $49.9 million in 2006 and the consumer electronics product range experienced a 53% increase in revenue compared with the previous corresponding period.</p>
<p>Legend’s focus on increasing sales of higher margin products saw the gross profit margin increasing to 11.8% from 10.8% previously.</p>
<p>Revenue from Asia represented 53.6% of turnover, while the South African business grew from $1.3m in sales in its first partial year of full Legend ownership to over $15.2 million.</p>
<p>“Demand in the South African market is strong and Legend expects to achieve solid revenue growth again from this market,” Mr Dowe said.</p>
<p>“The Asian operations are continuing to grow strongly and the Hong Kong sales team has been expanded to take advantage of opportunities in China and the Asian region,” Mr Dowe said.</p>
<p>He said Legend would continue to focus on increasing sales in the Asian region and expanding the distribution network.</p>
<p>The company had more than adequate production capacity at both the Adelaide and Singapore facilities.</p>
<p>“The automated production facilities are achieving excellent outputs at industry leading quality levels,” Mr Dowe said.</p>
<p>Turning to the current financial year Mr Dowe expected the first contribution from the Cabac acquisition to add significant revenue, profits and positive cash flow and improve overall margins. The Cabac division services the electrical industry focusing on electrical components for building, infrastructure and industrial applications.</p>
<p>For the financial year ended 30 June 2006 Cabac achieved an EBIT of $5.5 million on revenue of $56.4 million. The result was not included in the Legend financial result as settlement was on July 3, 2006, but the EBIT result exceeded the higher end expectation announced at the time of the acquisition.</p>
<p>“We will continue to review acquisition opportunities in the electronics and electrical industry which strengthen Legend’s sales and distribution capacity and technology and engineering base that meet Legend’s financial criteria,” Mr Dowe said.</p>
<p>The latest result represents earnings per share of 7.7c – a 32.7% increase on eps of 5.8c previously. The final fully franked dividend of 1.5c a share will be paid on October 16. Shareholders have a dividend reinvestment plan.</p>
<p>Further information:
Bradley Dowe 0418 656 500</p>

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