Pico to focus on Asia to offset US, Europe weakness

Pico Far East Holdings Ltd, a Hong Kong-based exhibition and event marketing services provider, plans to focus its resources in Asia, particularly in the Greater China area, expecting the region to boost its revenue growth by between 10 to 20 percent in 2013.

For the 12 months ended Oct 31, 2012, Pico Far East recorded a turnover of HK$3.86 billion, a 10 percent increase from a year ago; of which HK$2.16 billion, or 55.9 percent, was contribution from the Greater China area, and a 21.7 percent increase year-on-year.

Looking at 2013, the economic environment for the company is far from desirable, as the US economic growth is still very slow while there are still some uncertainties in Europe, which is why the company will continue to focus on Greater China, Lawrence Chia, chairman and chief executive at the company, told a press conference on Friday after it released its annual results.

"China is still the most optimistic market we have...I believe for the next 10 years, revenue from Greater China will be maintained to account for a major part of our income resource and we will continue to expand our market share in this region" said Chia.

Chia also said that the company has already secured several contracts from a strong pipeline of up-coming major projects in 2013. Although he refused to disclose the contract value on hand, he said he is confident that the company will achieve a 10 to 20 percent revenue growth in 2013.

During the 2012 financial year, the company's profit attributable to its owners was HK$238.5 million, or 19.66 HK cents per share, a 3.8 percent fall from the same period a year ago.

A final dividend of 5.5 HK cents per share was recommended.

The profit decline was due to some one-off restructuring costs incurred by the consolidation of the company's US operations as well as the consolidation of its India operations, according to the company.

In 2012, the company's gross profit margin was 28.1 percent, a 1.8 percentage points decline from a year ago. Chia explained that the squeezed margin was mainly because the company has not yet realised the major portion of revenue from a large project it finished last year as well as some inventory write-off in India.

Chia said that without these one-off factors that occurred in 2012, the company's gross profit margin should be able to stand between 30 to 31 percent in 2013.

By the end of October 2012, Pico Far East's cash on hand was HK$939 million. Chia said that the company is looking for M&A opportunities.

Currently, Pico Far East is engaged in negotiations of several potential acquisition targets, which include show management companies located in China, said Chia.

sophiehe@chinadailyhk.com