Hotel Operations 13,848 15,499
(10.65)
(991)
(2,485)
.60.12
Securities and Commodities Broking
Investments Securities(6,316) 10,005
Dealings and Others
Food Merchandising
(22,991)
Table 3: Table of Operating Profit Margin
Operating Profit Percentage
31.69
Margin
Change
1987
1986
(Percent)
Retail Department
Stores
7.23
5.49
Insurance and
12.94
(16.87)
Related Business
Property Rentals
76.27 100
(23.73)
Hotel Operations
25.23 26.99
(6.52)
Securities and
(2.56) (11.67)
78.06
Commodities Broking
Investments Securities (20.45) 11.65
Dealings and Others
Though it appears from the above breakdown that reve- nue from hotel operations has decreased, it is not as a result of a downturn in business, but rather a result of the sale of the Fortuna Court Building as a part of the Group's fund- raising exercise in 1986.
The Group was forced in 1986 to increase its stake in Wocom Holdings Ltd by about $HK40 million after a number of Wocom's founding members decided to pull out.
In 1987 the Wocom Group of Companies, the commodi- ties and securities-broking arm of the Group, was signifi- cantly affected by the Stock Market Crash in October.
During 1987 Wocom made efforts to recover money owed to it by clients, much of it owed to the company by Mr Lambert Kwok, a sum believed to be between $HK10 million and $HK18 million.
A major 'contribution' to the last Year's Profit was the streamlining of operations and the axing of unprofitable
areas.
In 1986, the Profits of the Group were dragged down by about $HK23 million by the Group's Food Merchandising
Division.
This Division consisted of Wing On Foods Company Ltd and Swensen's Of Hongkong Ltd, an ice-cream manufac-
turer.
Wing On Foods was disposed of in 1986, leaving Swensen's as The Wing On Group's only interest in food processing.
The results of Swensen's were deemed not significant enough to warrant their own category; however, it would be interesting to know how much profit or loss Swensen's contributed to the 1987 Year's Profits.
It appears that the policy of the Group now is one of more honesty and pragmatism: If it ain't makin' money, close it!
TARGET contacted the Group for comment on the streamlining of its operations and the reasons for this sudden turn-around in profitability, but the Group was reluctant to
comment.
Note: Under the ‘Insurance and Related Busi- ness' category, Investment Income, Rental Income, Net Profit on sales of securities, and Net Insurance Premiums from those insur-
ance subsidiaries within the Group have been included in this category this year in order to reflect the performance of this division more appropriately. Therefore, the figure differs from the 1986 calculation.
The Wing On Bank
The Wing On Bank posted a Profit of $HK8.85 million in 1987 compared with $HK1 million Profit in 1986.
The Group's share of profit from The Wing On Bank increased from $HK452,000 in 1986 to $HK3.98 million in
1987.
Though The Wing On Bank has returned to profitability, the books of The Wing On (Holdings) Ltd still bear the scars
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