Company reports improved gross profit margin, but impact of Covid-19 remains uncertain.
VTech Holdings Limited has announced its results for the financial year ended 31st March 2020, showing an increase in higher gross profit margin.
Group revenue for the financial year ended 31st March 2020 increased by 0.2% to US$2,165.5m, as higher sales in Europe and Asia Pacific offset lower sales in North America and Other Regions. Profit attributable to shareholders of the company grew by 11.3% to US$190.7m. This was mainly attributable to higher gross profit, as a result of lower costs. Basic earnings per share increased by 11% to US75.7 cents, compared to US68.2 cents in the previous financial year.
In standalone products, European sales of VTech branded products were down. Lower sales of infant and toddler products, the Toot-Toot family of products and the Kidi line offset growth in pre-school products, KidiZoom Camera and Switch & Go Dinos. A new range of interactive animal play sets, ZoomiZooz, was introduced to key markets in Europe and was well-received. Sales of LeapFrog standalone products increased, led by rising sales of infant, toddler and pre-school products.
In North America, however, the growth of LeapFrog learning toys was particularly robust. The brand benefitted from higher sales of infant, toddler and pre-school products as retailers increased shelf space. Good sell-through of items carrying overt educational value, such as LeapFrog Learning Friends 100 Words Book and 2-in-1 LeapTop Touch, also boosted growth. The newly launched interactive building sets, LeapBuilders, saw solid sales as retailers gave support to the range.
For the VTech brand, pre-school products and the Kidi line achieved higher sales in North America, driven by the success of items such as Myla the Magical Unicorn, PJ Masks Learning Watch and the Kidi Star Karaoke Machine. This growth offset declines in infant and toddler products, KidiZoom Camera and the Go! Go! Smart family of products.
“The outbreak of the novel coronavirus in the final three months of the financial year 2020 caused Group revenue for this quarter to decline. It resulted in a flat revenue for the full financial year, while profit recorded growth due to higher gross profit margin,” said Mr. Allan Wong, chairman and group CEO of VTech Holdings Limited.