CHAIRMAN'S STATEMENT
Group Results and Dividend
The Board of Directors announces that the audited consolidated profit for the year ended 30th June, 1988 after transfer to the Development Fund in accordance with the Profit Control Scheme amounted to $48.63 million compared with $46.74 million for the previous year.
The Directors will recommend to shareholders at the forthcoming ordinary yearly meeting to be held on 9th December, 1988 the payment of a final dividend of 33 cents per share. This, together with the first interim dividend of 21 cents per share, a special dividend of 5 cents per share and a second interim dividend of 18 cents per share already paid, will make a total dividend for the year of 77 cents per share compared with 75 cents per share for the previous year.
Result of Bus Operation
Bus operating profits decreased from $73.22 million in 1987 to $69.65 million in 1988. In accordance with the Profit Control Scheme, the sum of $22.13 million was transferred to the Development Fund.
Traffic Activities
The number of passengers carried during the year under review increased by 1.7 per cent from 315.3 million to 320.7 million whilst kilometres operated decreased slightly from 55.6 million to 54.6 million.
The general shortage of labour affecting Hong Kong also caused problems for the Company in respect of recruitment of drivers. This feature, coupled with the effects of serious traffic congestion, affected the reliability of our services and the number of kilometres operated.
Further stages of the Route Development Programme were implemented with two new local routes and three new Central) cross harbour routes being introduced to serve areas of new demand. These were: Route 87 (Heng Fa Chuen and Route 96 (Lei Tung Estate - Causeway Bay) on Hong Kong Island, and Cross Harbour Route 110 (Tai Koo Shing - Tsim Sha Tsui East); Route 119 (Central - Shun Lee) and Route 141 (Central - Kwun Tong via Airport Tunnel).
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Rationalisation measures to offset lower patronage in the urban area involved the withdrawal of three routes and the introduction of new Route 26 between Lai Tak Tsuen and Hollywood Road.
Bus Fleet
After further rationalisation, the Company's total fleet at 30th June, 1988 stood at 1,004 buses with a total carrying capacity of 129,554. A further twenty three-axle high-capacity double-deck buses were purchased during the year under review and most of these have now entered service in Southern District or on cross-harbour routes.
In July 1988 the Company took delivery of two 33-seater midicoaches, one of which is equipped with air-conditioning. These vehicles are being used on evaluation trials in revenue-earning service.
Extension of Franchise
The Company's application for extension of franchise up to 31st August, 1991, to which I drew attention in my Statement last year, was approved by the Government. The Company has now applied for a further two-year extension to 31st August, 1993.
Purchase of Computer System
A contract has been entered into for the design and installation of a computer system to provide upgraded management information.
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