Good afternoon, ladies and gentlemen, and welcome to our viewers online. Today, VTech Holdings Limited is announcing its interim results for the six months end o f September 30th, 2012. For your reference, the webcast of this announcement, accompanied by the presentation you will see shortly, will be available on VTech website starting at 10:30 P.M. this evening, Hong Kong time. Here to present the results, on my left are Mr. King Pang, Executive Director and Group President; Mr. Allan Wong, Chairman and Group CEO of VTech Holdings; Mr. Andy Leung, Executive Director and CEO of Contract Manufacturing Services; Ms. Shereen Tong, Group CFO. First of all, Ms. Tong will present the group's financial performance. Next, Mr. Pang will review the group's operations and talk about our strategy. Mr. Wong will then give his outlook, and then we will have Q&A session.
Now, may I invite Ms. Tong to open today's presentation. Ms. Tong, please.
Thank you, Grace. Good afternoon, ladies and gentlemen, and all viewers online. First of all, I would like to present the financial highlights of the group for the six months end of September 30th, 2012, compared with the same period of the last year. As you see from the slide, the revenue of the group rose by 2.1% to $876.1 million . The increase in revenue was mainly driven by the higher sales in North America, Europe, and Asia Pacific, which contrast with a sales decrease in the other regions. Our gross profit rose by 2% to $266.3 million , and our gross profit margin maintained at 30.4%, same as the corresponding period of the last year. The decline in raw material prices largely offset the higher labor cost and manufacturing overhead arising from the increase in wages and production capacity during the first half of the financial year.
Our operating profit rose by 3.1% to $99.3 million , and our operating profit margin also increased from 11.2%- 11.3%. The improvement in both operating profit and operating profit margin was mainly due to the increase in gross profit, as well as the lower selling and distribution cost resulting from the decrease in spending on advertising and promotion activities and the lower warranty payments. These offset the increase in administrative and other operating expenses compared with the same period of the last year. Our profit attributable to shareholders rose by 3.1% to $91.2 million , and our net profit margin also increased from 10.3%- 10.4%.
As a result, our basic earning per share rose by 2.5% to $0.365, and our board of directors has declared an interim dividend per share of $0.16, which is the same as the first half of the last financial year. Turning to the revenue by region. North America remains the largest market of the group, accounting for 51.1% of the group's revenue. Our revenue in North America rose by 1.8% to $439 million. The increase in revenue was mainly due to the higher sales of our electronic learning products and the Contract Manufacturing Services business, which offset a decrease in revenue of our telecom products. As for European market, our revenue rose by 4.6% to $352 million.
The sales growth in Europe was largely driven by the higher sales of our electronic learning products and the Contract Manufacturing Services business, which offset a decrease in revenue of our telecom products compared with the same period of the last year. Our revenue in Asia Pacific rose by 6.9% to $51 million. The increase in revenue came from the higher sales of our telecom products and the electronic learning products in the first half of the financial year. Other regions include Latin America, Middle East, and Africa. Our sales in other regions reduced by 20.1% to $34.1 million. All our three product lines had sales decline in other regions compared with the same period of the last year. Our stock balance as of September 30, 2012 increased from $320.2 million- $340 million compared with the same period of the last year.
Our stock turnover days also increased slightly from 108 days to 111 days. The increase in stock level was mainly to cater for the increased demand of the group's product in the second half of the current financial year. We have also arranged early production of the group's products in order to better utilize the production capacity of the group. Our trade debtors balance as of September 30, 2012, increased from $339.5 million- $377.3 million over the same period of the last year. Our trade debtors turnover days also increased slightly from 58 days to 61 days. The increase in trade debtor balance and trade debtors turnover days was mainly due to the growth in sales in the first half of the current financial year compared with the same period of the last year. Our financial position remains very strong.
We are debt-free, and our net cash balance as of September 30, 2012, was $108.9 million. That's all of my presentation. I will now invite Mr. King Pang to share with you our operational review and strategies. Mr. Pang, please.
Thank you, Shereen. Good afternoon, ladies and gentlemen. A special welcome to our viewers online. I am now going to take you through a review of our operation during this reporting period. After that, I will turn the floor over to Mr. Wong, who will share with us our outlook for the second half of the financial year. As in previous reports that I gave, I would like first to share some updates on the cost environment during this report period. As Shereen has mentioned, the intense pressure of material cost that we experienced last financial year has eased off a bit. In fact, the cost of a number of our raw material has even decreased from their peaks in the last financial year. As you probably know, the impact during this period of Renminbi appreciation has also eased off a bit.
On the flip side, labor cost and manufacturing overhead cost in China have continued to increase. Shortage in labor created tremendous challenges in recruitment and retention of workers. In response to this, we have raised workers' compensation. We have also stepped up investments in our factory improvements. We take all these factors together, as Shereen has reported, our gross margin remained the same. Now let us turn to our segment results. First, North America. In this region, group revenue grew 1.8% to $439 million. This region remains the biggest contributor of group's revenue, accounting for 51%. In North America, higher revenue from electronic learning products and CMS offset lower revenue from telecom products. Let us look at telecommunications products. Revenue declined by 10.4% to $197.4 million.
This decrease was mainly driven by drops in residential phone sales, which is a result of the continuing maturation of the U.S. residential phone market, as well as weaker than expected demand, which we believe is caused by the uncertain economic environment. In spite of this tough market environment, we managed to maintain our number one position in the U.S. The strength in our product development is again supported by a number of products that have sold well and received wide acclaim. This include our Connect to Cell phone systems, which proves that connectivity with mobile phone remains a feature valued by consumers. On the design side, our retro phone has also won a lot of acclaim for its design innovation and its value to consumers. Sales of our commercial phones, including SMB phones and hotel phones, have increased during this period.
This growth was primarily driven by a full six-month contribution from the hotel phone and increased sales of our SynJ and Synapse business phone systems. As far as new products are concerned, in September this year, we began to ship our latest addition to our SMB range, a new four-line small business system to office superstores in the U.S. This is a 16-station system that is user-friendly, easy to install, and does not require professional maintenance. This highly competitive product has been well received by all our retailer customers. Turning now to electronic learning products. ELP revenue rose by 26% to $145.4 million. This growth has been driven both by platform and standalone products. In the platform area, education tablets was the main driver for the revenue growth.
Here, we have benefited from a full six months of shipment of the InnoTab family as compared to the same period last financial year, where the contribution of educational tablets was quite minimal. During this period, InnoTab was renewed to a new generation, InnoTab 2. At the same time, MobiGo, our educational handheld game console, was also updated to MobiGo 2. MobiGo 2 has also made a good contribution to this growth. Stand-alone products also performed strongly in North America. This was led by the Switch & Go Dinos line, which is a range of new toys that transform between dinosaurs and vehicles. This line was launched in May, and it has gained additional shelf space for us beyond the learning aisle, which as you know, is where we traditionally sold our ELP products.
A number of new stand-alone products in our core learning range have also contributed significantly to this sales growth during the first half. CMS revenue increased by 0.6% to $96.2 million. We saw good growth in industrial products and commercial lighting. But on the flip side, this was offset by a decline in sales to one of our professional audio customers who entered the period with high inventory. Apart from that, if you look across our professional audio customers, the sales of the other customers have remained stable. Sales of our internet phones for office use were also lower during this period. This is due to a change in the inventory management strategy from our customer in this particular segment or in this particular category. Now let's turn to Europe. In Europe, group revenue rose by 4.6% to $352 million.
Europe as a whole represents 40.2% of gross revenue. Again, as in North America, in this region, higher revenue from ELP and CMS offset lower revenue from telecoms products. Telecommunication products revenue decreased by 8.1% to $106 million. The decline in revenue in this region, again, was primarily driven by lower sales of cordless telephones. We have seen reduced inventory from our customers, who have also shortened their order lead time, which probably is due to the weak economic conditions among a number of European countries. On the positive side, we have made good growth in the categories of integrated access devices and baby monitors. In this region, we have maintained our position as the leading manufacturer of cordless telephones, specifically in Western Europe. Turning next to electronic learning products. Revenue increased by 3% to $128.3 million.
I have to first, before talking about products, mention that since we do the majority of our business in this region in local European currencies and we report our results in U.S. dollars, the increase that we have seen here was actually a result of the weaker EUR/USD exchange rate during this reporting period as compared to the same period last financial year. That said, for electronic learning products, as in North America, the growth was across the board, driven by platform, especially educational tablet products, as well as stand-alone products, including the Switch & Go Dinos line, as well as a line of infant vehicles called Toot-Toot Drivers. As in North America, during this period, InnoTab was updated to InnoTab 2 in the U.K., whereas our second-generation tablet for the continental European market, Storio 2, was shipped to our major Western European markets.
Country-wise, the U.K. and France have performed the best among all the European countries. During this period, we have seen lower sales in Germany, Spain, and the Benelux countries. CMS. Our CMS revenue rose by 22% to $117.7 million. This revenue increase was driven by strong growth in medical and health products as we increased sales to existing and new customers. We also saw robust growth in wireless headsets as we benefited from new product launches by our customer, who has also consolidated their supplies. In the category of switching mode power supplies, we have also seen growth, and this was contributed mainly by solar power inverters. Sales of professional audio equipment, on the other hand, saw a slight decline during this period. Turning next to Asia Pacific. Revenue increased by 6.9% to $51 million. This region represents 5.8% of group's revenue.
In this region, revenue from telecoms products was up 31.7% to $18.7 million, and this was driven mainly by increased orders from our Japanese customer. If you remember, after the March 2011 earthquake, there was a decrease in order, and now it has recovered from that low during the same period in the last financial year. We have also expanded our sales in Taiwan and entered new markets in this region for our telecommunications products. In Australia, we have seen a moderate decline in sales in the telecommunications products, and this is mainly because the introduction of a number of new products have been scheduled in the second half of the financial year. Electronic Learning Products. Revenue in this region rose by 6.7% to $11.2 million, and this increase was driven by higher sales in China, Korea, and Japan.
Australia, which is the largest market for ELP in this region, held steady during this period. CMS revenue in Asia Pacific declined by 8.3% to $21.1 million. In Japan, CMS revenue was lower as increases in sales in marine radio were unable to offset lower sales in consumer LED light bulbs as well as in medical and health products. The handheld radiation detector business has returned to normal after the effects of the earthquake last year have subsided. Worthy of mentioning is our CMS business growth in China and Korea. In China, since we opened our dedicated manufacturing facilities last November for China, we have helped customers to distribute products in the domestic market, China market, a lot more efficiently. In Korea, we have managed to grow our business with an existing customer. Finally, other regions. Other regions include Latin America, the Middle East, and Africa.
Revenue in this region during this period was down 20.1% to $34.1 million. This region represents 3.9% of group's revenue. Growth for all the products in this region, in Africa, in the Middle East, was more than offset by decline in Latin America. For telecommunication products, revenue dropped 27.8% to $19.5 million, whereas for ELP's, revenue dropped 6.5% to $14.3 million. CMS revenue dropped 25% to $0.3 million. Finally, I'll give you a quick update on the status of the execution of our growth strategy, which again, is based on the four pillars of product innovation, market share gains, geographic expansion, and operational excellence. In the area of product innovation, I'm not going to go through the litany of new products that are reported during the earlier part of our operations report.
In addition to what I've already talked about in the telecommunications products, we have a new line of products called CareLine, which Allan will talk more about. For electronic learning products, the InnoTab range in the second half of this financial year has already been augmented by InnoTab 2S, which is our second-generation educational tablet with Wi-Fi capability. It will also soon be joined by InnoTab Baby, a tablet designed specifically for baby. In the area of market share gains, I am happy to report, as I did earlier in this operations report, we have maintained our number one position in cordless phone manufacturer worldwide, as well as in electronic learning product suppliers. In area of Contract Manufacturing Services, our growth continues to outperform the entire global EMS market. Geographic expansion.
You have heard in my earlier report that we have further expansions into Taiwan, as well as new Asian markets for our telecoms products. For electronic learning products, we have made further inroads into China, Korea, and Japan. CMS, we have also made strong growth in China and Korea. We know well that expansion outside of our main North America and Western European market is a critical part for the long-term growth of group, and we will continue our attention as well as our investment into these regions. Finally, we continue to exercise tight cost control and prudent expense management, and continue to invest both efforts and management attention into improving the efficiency of our operation. Financially, this can be seen in our financial figures, specifically in our SG&A expenses.
Compared to the same period last financial year, we have been able to achieve a slight decrease in this expense. This concludes my report, and I will ask Mr. Wong to share with us our outlook for the second half of the financial year. Allan.
Thank you, King. Ladies and gentlemen, and all the viewers online, I would like to share with you the outlook for the rest of the year. Looking at the general situation, the global economic environment remains challenging. In the U.S., growth is uncertain, with a lingering high level of unemployment. In Europe, austerity measures are depressing consumer demand. Despite this, we remain cautiously optimistic of achieving overall top-line growth in the financial year 2013. That said, labor cost and manufacturing cost will increase further. Additionally, we will continue to invest in corporate social responsibility to achieve sustainable development with our people, the community, and the environment. As a result, we do not expect gross margin to improve, and bottom-line growth will be modest. Looking at the prospect of our different product lines.
In telecommunication products, the operating environment for residential cordless phones will continue to be difficult. Consumer demand is expected to remain soft while our customer has been delaying replenishment until the last minute. Despite these challenges, we will build our success in SMB and hotel phones while bringing further innovation to the residential phone market. In North America, we expect our sales of commercial phones to increase. With the introduction of the new four-line small business system, we have a strong line of well-priced, easy-to-install SMB phones. This will enable us to extend our market penetration into broader market segments. We also expect to ship more hotel phones as our reputation as a reliable supplier increases in this sector. In the residential phone area, we expect to outperform the market. We have launched a new category of phone called CareLine, which King has mentioned earlier.
This is designed to meet the needs of an aging population and offers innovation such as voice announce caller ID, voice command recognition, and a portable safety pendant, all without a monthly fee. We have been rolling out the line to the U.S. market since October this year, and I am pleased to report that consumer response to this new line has been very positive. We expect that sales of telecommunication products via online retailers will also be higher as we continue to increase our efforts in expanding these channels. In Europe, we have started to see some improvement in the order situation, so we expect sales in the second half will improve over the first half. In Asia Pacific, sales will pick up in Australia as we roll out new products, while the positive momentum we have achieved in Japan we expected to continue.
Now, looking at ELPs, we expect the positive momentum to our ELPs to continue despite the challenging global economic environment. We expect both platform and standalone products to maintain their solid contribution to growth for the full financial year. In North America, platform products will lead the way in the second half as we benefit from the full impact of MobiGo 2 and InnoTab 2. They have been joined since late October by InnoTab 2S, which is a further evolution of our line of educational tablets featuring a secure Wi-Fi connection. In addition to hardware, we are also expanding our cartridge and download offering. Our download library, which is accessible through the Learning Lodge, already contains over 200 ebook, game, video, and music titles. By Christmas this year, we will have over 300 titles available for download.
In standalone products, the Switch & Go Dinos line will continue as the growth driver for the full financial year, augmented by our core infant and preschool ranges. In Europe, we expect a continuation of our good performance in the U.K. and France, led by InnoTab 2 and Storio 2, respectively. This will be reinforced by the Switch & Go Dinos and Toot-Toot Drivers, as well as our core standalone products. We expect Germany and the Benelux to continue to return to growth for the full financial year, but sales in Spain are expected to remain slow due to its weak economy. Globally, ELP sales via online retailers will continue to grow as we maintain our increased focus on this fast-expanding channel. Now, finally, our Contract Manufacturing Services.
The global electronic manufacturing services market is forecast to remain subdued in the calendar year 2012, but our CMS will continue to outperform the industry. Business from existing customers is expected to be stable, so growth will be driven by new customers. Professional audio equipment will see growth for the full year. Sales in North America will return to normal as our customer has now worked through their inventory. In Europe, sales will rise as we have added several new customers in Germany in the first half, and their orders will ramp up in the second half. We also expect to add more customers in Europe in the coming six months. Sales of switching mode power supplies, including those of solar power inverters, will be stable in the second half, following the good growth in the first half. For the full year, solid growth is expected in this category.
Our other product categories will achieve higher revenue also. Growth in commercial solid-state lighting will more than compensate for the further sales decline in consumer LED light bulbs. Sales of wireless products will continue to increase, led by wireless headsets and marine radio. The enhanced manufacturing facility of CMS, which started operations in November 2011, will help drive growth. It will support continued expansion in our China business, as it is helping our customers to distribute products more effectively in the domestic markets. It will also enable us to grow our medical and health products, as we are now able to manufacture sophisticated products with stringent safety and quality requirements, including those require FDA approval. In conclusion, VTech has strong, once again, an ability to deliver growth in the face of difficult market conditions, and this testifies to the strength of the group.
Although labor costs and manufacturing overhead in China have continued to rise, our gross margin has stabilized as raw material prices pressure has eased off. In addition, corporate social responsibility measures we put in place will foster a stable workforce, which in turn will lead to an improvement in our efficiency in the longer term. VTech is a company with strong R&D, market leadership position, a strong balance sheet, and a highly efficient operation. We will continue to focus on product innovation and geographic expansion to drive growth while managing cost and risk to enhance profitability. Thank you very much