Munich, 27 August 2012. KINGHERO AG, the German holding company of a fast-growing Chinese fashion company, shows a constantly positive business development in the first half year 2012. Revenues of the company increased by 35.3% to EUR 56.7 million in the first six months 2012 (H1 2011: EUR 41.9 million). Also gross profit grew by 33.8% to EUR 22.0 million while the gross profit margin remained almost stable at 38.8% (H1 2011: 39.6%). With an equity ratio of 88.1% KINGHERO is well prepared for future expansions.

Within the first six months 2012 KINGHERO continued its growth story. The company realized revenues of EUR 56.7 million (H1 2011: EUR 41.9 million) and hence exceeded revenues of the first half year 2011 by 35.3%. One of the success factors was the increased number of distributors from 38 as at 30 June 2011 to 48 as at 30 June 2012. These distributors run a total of 370 stores. At the same time the number of KINGHERO flagship stores increased to 65 by the end of the reporting period (30 June 2011: 28 flagship stores).

Besides the successful expansion of the distribution network, also the attractive product pricing, contemporary design as well as the variety and product mix of KINGHERO's portfolio contributed to the positive development. It resulted in a further increase of the average selling price per unit by 17% compared to H1 2011.

Along with the revenue growth the gross profit increased significantly by 33.8% to EUR 22.0 million in H1 2012 (H1 2011: EUR 16.4 million) with an almost stable gross profit margin of 38.8% (H1 2011: 39.6%). In contrast, EBIT decreased slightly from EUR 12.6 million in the first half year 2011 to EUR 12.2 million in the same period 2012. This was mainly caused by higher selling and distribution expenses in line with the communicated strategy, higher maintenance costs for the increased number of KINGHERO flagship stores and increased administrative costs. As a result EBIT margin fell to 21.5% in H1 2012.

KINGHERO's equity ratio of 88.1% shows, that the company is still very well capitalised and has enough financial resources for future investments and further expansion.

Optimistic outlook

As planned in its growth strategy, KINGHERO seeks to develop its existing merchandise categories - especially in accessories - and increase sales, both with distributors as well as with its own stores. Currently the company focuses on enhancing the productivity of existing selling points and is therefore partly restructuring its distribution network. For further strengthening its brand building, the company will also implement a consistent brand image for both, distributor and own shops in the second half of 2012.

The overall sales and margin development in the first half of the year 2012 is in line with the company's expectations. Based on the result of the first six months 2012, KINGHERO anticipates overall sales of approximately EUR 125 million for the whole year 2012 and sustainable margins on previous year's level. Given that there is no material negative change of company operation in the future, the management board of KINGHERO considers to propose the payment of a dividend about 10 to 15% of the 2012 net profit.

For more information on KINGHERO's business and financial development in the first six months of 2012 please see the interim statement published on the website www.kinghero.de.

About KINGHERO AG

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