Good afternoon, ladies and gentlemen, and welcome to all our viewers online. Today, VTech Holdings Limited is announcing its results for the six months ended 30th of September 2015. For your reference, the webcast of this announcement, accompanied by the presentation you will see shortly, will be available on our website starting at 10:30 P.M. this evening, Hong Kong time. Here to present the results, on my left are Mr. King Pang, the 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; and Ms. Shereen Tong, Group Chief Financial Officer. First of all, Ms. Tong will present the group's financial performance. Next, Mr. Leung will review the group's operations, and then Mr. Pang will talk about our strategy. Finally, Mr. Wong will give his outlook for the second half.
We will finish our presentation with a 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 share with you the financial highlights of the group for the six months ended 30 of September 2015, compared with the same period of the last year. As you see from the slide, the revenue of the group rose by 3% to $928.1 million. The increase in revenue was mainly driven by the higher sales in North America, Europe, and other regions, which offset the decrease in revenue in Asia Pacific region. Our gross profit, however, reduced by 1.4% to $286 million, and our gross margin also reduced from 32.2% to 30.8%.
The decrease in gross profit and gross margin was mainly due to the depreciation of the foreign currencies against U.S. dollar, change in product mix, and the higher manufacturing overheads arising from the higher wages in China and the production capacity compared with the same period of the last year. Despite the higher wages in China during the period, we were able to reduce the workforce through automations and process improvement to maintain a stable direct labor cost. Our cost of materials was also higher than the same period of the last year, which was mainly due to the change in product mix. Our operating profit reduced by 1.9% to $111 million, and our operating profit margin also reduced from 12.6% to 12%.
The decrease in operating profit and operating profit margin was mainly due to the decrease in gross profit and gross profit margin, which offset the decrease in total operating expenses arising from the reduced spending on advertising and promotional activities, and the lower royalty payments for the licensed product. Our employee-related costs and the legal and professional fees were also higher than the same period of the last year. Our profit attributable to shareholders reduced by 2.5% to $100.1 million, and our net profit margin also reduced from 11.4% to 10.8%. As a result, our basic earnings per share reduced by 2.4% to $0.399, and our board of directors has declared an interim dividend per share of $0.17, same as the first half of the last financial year.
Turning to the revenue by region, North America remained the largest market of the group, accounting for 49.7% of the group's revenue. Our revenue in North America rose by 2.4% to $461.6 million. The increase in revenue was mainly due to the higher sales of our electronic learning products and Contract Manufacturing Services business, which offset the decrease in revenue of our TEL products. As for European market, our revenue rose by 3.8% to $373.7 million. The higher sales of our Contract Manufacturing Services business offset the decrease in revenue of our TEL product and electronic learning products in the region compared with the same period of the last year. Our revenue in Asia Pacific region reduced by 3.1% to $59.7 million.
The decrease in revenue was driven by the lower sales of our TEL products and the Contract Manufacturing Services business, which offset the increase in revenue of our electronic learning products. Other regions include Latin America, Middle East, and Africa. Our sales in other regions rose by 15.3% to $33.1 million. The increase in revenue in other region was mainly due to the increase in sales of our TEL products and Contract Manufacturing Services business, which offset the decrease in revenue of our electronic learning products compared with the same period of the last year. Our stock balance as at 30 of September 2015 increased from $315.4 million to $367.9 million over the same period of the last year. Our stock turnover days also increased slightly from 140 days to 115 days over the same period of last year.
The increase in stock level was mainly to cater for the higher demand of the group's products in the second half of the financial year and the seasonality of the group's business. We have also arranged early production of the group's products in order to better utilize the production capacity. Our trade debtor balance as at 30th September 2015 increased from $387.4 million to $395.5 million over the same period of last year. Our trade debtors turnover days also increased from 59 days to 61 days. The increase in trade debtors balance was mainly due to the growth in revenue in the first half of the financial year compared with the same period of last year. Our financial positions remains very strong. We were debt-free, and our net cash balance as at 30 September 2015 was $104.9 million. That's all of my presentation.
I will now invite Mr. Andy Leung to share with you our operations. Mr. Leung, please.
Thank you, Shereen. Good afternoon to all you here, and a warm welcome to those joining us online. I will begin by looking at the cost environment. Although the material price decreased slightly over the same period last year, cost of material rose due to a change in product mix. Manufacturing overhead also increased as wages in mainland China continued to rise and the group added manufacturing capacity. Despite the strong headwind from the foreign exchange movement and wage inflation, VTech was able to reduce the workforce through automation and process improvement, resulting in stable direct labor costs. The gross margin declined over the same period of last year. This was mainly due to the depreciation of currency against the U.S. dollar, the change in product mix, and also the higher manufacturing overhead. Turning now to our sales by region, beginning with North America.
Group revenue in North America in the first six months of the fiscal year 2016 increased by 2.4% to $461.1 million, supported by the higher sale of ELP and also the Contract Manufacturing Services. North America is the group's largest market, accounting for 49.7% of the group revenue. ELP revenue in North America up by 5.3% to $148.7 million, as higher sales of standalone products offset lower sales of platform products. VTech retained its position as the number one infant toy manufacturer and also preschool electronic learning category in the United States. The growth of the standalone product was driven by the sale increase in infant products, Go! Go! Smart Wheels, and also Go! Go! Smart Animals, which offsets low sales of Switch & Go Dinos and also preschool products. The launch of a new product also support growth, including KidiZoom Action Cam, Go! Go!
Smart Friends, Baby Amaze, and also Flipsies. Flipsies is a brand-new product range of transformable dolls and playset. It began to sell in the U.S. in August and has allowed the group to expand into a new product category. Sales of platform product, in contrast, decreased. In August, the second generation of VTech Smartwatch, KidiZoom Smartwatch DX, hit the shelf in the U.S. and was well-received. However, higher sale of the KidiZoom Smartwatch line was unable to compensate for the lower sales of InnoTab educational tablets, which were affected by the continued contraction of the highly competitive children tablet market. Revenue from the TEL products in North America decreased by 7% to $200.2 million. Sales of the residential phone were lower as the fixed-line telephone market had continued to contract. Nonetheless, VTech strengthened its number one position in the U.S. residential phone market.
Sales of commercial phones and other telecommunication product, in contrast, continues to rise. Baby monitor led the growth on the strong sell-through and additional product placement. Sales of VTech 4-Line Small Business Phone System also increased as the new series was well received by the market. The VTech brand, ErisStation, a conference phone with wireless microphone and ErisTerminal, a SIP-based business phone system, saw steady growth in sales as the product range were completed with the addition of new models. Contract Manufacturing Services revenue in North America grew by 19.8% to $112.7 million. The growth was driven by higher sales of professional audio equipment and also industrial products, which offset lower sales of solid-state lighting. Professional audio equipment posts good growth as a major client increased order after resolving excess inventory issue. At the same time, other customers saw highest demand for their products.
Growth in this category also benefits from the addition of new customers. Industrial products also record higher sales, and VTech gained more business following a customer decision to consolidate suppliers. Sales of solid-state lighting, however, trend lower as the demand for the customer product decreased. Now looking at Europe. Group revenue in Europe in the first six months of the fiscal year 2016 was up 3.8% to $ 373.7 million, mainly due to higher sales of CMS. Europe is the second-largest market of the group, representing 40.3% of the group revenue. ELP revenue in Europe decreased by 8.7% to $ 129.2 million, a decline that was mainly due to the depreciation of the European currency against the U.S. dollar and the lower sales of platform products. Among VTech key Western European markets, sales in U.K. increased, while those in France, Germany, and Spain declined.
During the first nine months of the calendar year 2015, VTech continues to gain market share and strengthen its position as the number one infant toy manufacturer in France, the U.K., Germany, and Belgium. In platform products, as in North America, the children educational tablet remained challenging. The contraction of the market and tough competition led to lower sales of InnoTab Storio, which offset higher sale of KidiZoom Smartwatch. Sales of standalone product in Europe were flat during the period. Toot-Toot Drivers, Toot-Toot Animals, and Little Love record growth, offsetting the decline in Switch & Go Dinos infants and preschool products. KidiZoom Action Cam and Flipsies were rolled out to the group major European market during the period, generate incremental sales. TEL product revenue in Europe decreased by 4.1% to $ 74.4 million. Sales of residential phone were lower as the fixed-line telephone market continues to contract.
Despite the weak Euro, which impact our customer, sales of commercial phone and other telecommunication product rose significantly. In commercial phone, sales of CAT-iq headset increased as network operator continued to encourage the replacement of traditional PSTN with the voice-over-IP service. Sales of ErisStation and ErisTerminal also increased, and in September, the group launched a VTech brand ErisTerminal in the U.K. market. In other telecommunication product, baby monitor registered respectable growth as VTech increased sales to existing customer and increased market share. The group also start selling VTech brand baby monitor in the U.K. Growth in IAD also strong as the group began ship a high-end device that support VDSL and the dual band 802.11ac to several customers. Contract Manufacturing Services revenue in Europe was up by 20.8% to $170.1 million.
Sales of hearable, professional audio equipment, and home appliance increased, while those of power supply were stable. Hearable recorded high sales as VTech increased revenue share with one major customer alongside strong market demand for the customer product. In professional audio, the Group secured more projects from existing customers, and there was a sales contribution from new customers as well. In home appliance, sales to existing customers also recorded an increase. Turning to the Asia-Pacific. Group revenue in Asia-Pacific decreased by 3.1% to $59.7 million. Lower sales of TEL product and CMS offset growth in ELPs. The region accounted for 6.4% of the Group revenue. ELP revenue in Asia-Pacific was up 63% to $20.7 million, driven by sales increase in Mainland China, Japan, and Australia. Mainland China saw strong growth for infant product, Switch & Go Dinos, Go! Go! Smart Wheels, and KidiZoom Smartwatch.
Increased market effort, expansion of distribution base, and high online sales accelerated growth. Sales in Japan were increased by the launch of our KidiZoom Smartwatch. In Australia, sales returned to a growth path following the establishment of the Group's own sales office in the country. TEL product revenue in Asia-Pacific decreased by 26% to $16.5 million, as sales weakened in Australia, Japan, and Mainland China, offsetting growth in Taiwan, India, and Hong Kong. In Australia, we successfully replaced all the Telstra brand phones with our own brand across all channels during the period. In Japan, sales were lower due to delay in new product launch by customer. In Mainland China, demand for residential phone was weak. CMS revenue in Asia-Pacific declined by 15.4% to $22.5 million.
Sales of testing and measurement equipment fell as the weaker yen this year led the customer to move production back to their factory in Japan. The keen competition from Mainland Chinese brands faced by our customer resulted in lower order for solid-state lighting, while sales of medical and health equipment trended lower on weakening demand for customer products. Sales of home appliance and hearable, however, saw an increase during the period. Finally, other regions. Group revenue from other regions increased by 15.3% to $33.1 million, as higher sales of TEL product and CMS offset lower sales of ELP. Other regions, which included Latin America, the Middle East, and Africa, represented 3.6% of the Group revenue. ELP revenue in other regions fell by 12% to $8.8 million. Higher sales in Middle East were offset by lower sales in Africa and Latin America.
TEL product revenue in other regions posted 28.8% growth to $23.7 million, driven by higher sales in Middle East and Africa. CMS revenue in the other regions was $0.6 million as compared to the $0.3 million in the same period last year. Thank you. King will now take you through our strategy.
Thank you, Andy. Good afternoon, ladies and gentlemen. As many of you well know, our strategy rests on the four pillars of product innovation, market share gains, geographic expansion, and operational excellence. I will take you through our progress in these four pillars. Product innovation is the most important of these four pillars. I will update you on what we have been doing to maintain our strong and continuous pipeline of new products. In ELPs, there are innovations abound in both standalone and platform products. In standalone products, we have expanded the highly successful Go! Go! Smart family of products with new products. The newest Go! Go! Smart range is now available nationwide in the U.S. We have also entered new aisles by launching new categories of products.
Flipsies, as you have heard from Andy, is a new range of transformable dolls and playsets that feature VTech's proprietary MagicPoint and MagicChat technologies. It has been launched in our North America and Western European markets, enabling us to expand into the girl aisle. We have also successfully entered the doll aisle with a range of interactive dolls. These are branded Little Love in Europe and Baby Amaze in the U.S. KidiZoom Action Cam, which you also heard from Andy, is the latest addition to our range of cameras for children. It was launched in spring in Europe and is now launched globally during the first half. For our core learning products, we continue to broaden and refresh our product portfolio as we are adding over 100 new models worldwide. Turning now to platform products.
We must start by noting that the market for children's educational tablets remains extremely challenging. Therefore, in order to broaden our portfolio and stabilize our platform business, we have introduced a number of innovative products in different form factors with the aim to capture demands in different market segments. In wearables, we have introduced the second generation of our smartwatch, KidiZoom Smartwatch DX. In addition to offering higher performance, this new generation provides exciting new features, including motion-activated games and 3D clock faces. For handheld gaming, we have recently launched DigiGo. It is a handy gadget for text messaging, photography, video taking, and music. In some ways, a sort of a smartphone for kids. Furthermore, we have launched a new educational TV gaming system called InnoTV. This console features an easy-to-use wireless controller with a large number of learning games bundled.
With built-in Wi-Fi, parents can download games and educational contents through our Learning Lodge library. Turning next to telecommunication products, where commercial phones and other telecommunication products are the growth drivers. In commercial phones, we have added to our range of ErisStation conference phones two new versions. They support two wireless microphones and SIP respectively. Our range of SIP phones has also been expanded. The original 3-line version is now joined by 5-line and 2-line versions. In other telecommunication products, we have expanded our baby monitor range with video models boasting a larger screen, as well as audio models featuring new features such as glow-on ceiling nightlight. We are also planning to enter the smart home arena by launching a range of wireless monitoring devices based on the ULE standard, which is short for Ultra Low Energy.
These products include ULE-enabled cordless phones, IP hubs, baby monitors, and a high-definition Wi-Fi camera. All of these wirelessly connect to a range of ULE controls and sensors. The products are expected to be launched in the U.S. and selected Asia-Pacific markets in the second half of this financial year. In residential phones, we will strengthen our global leadership in cordless phones with a continuous stream of feature-rich products with superior designs. Our Contract Manufacturing Services goes from strength to strength. It has delivered growth in each of the past 13 years. In the first half of this financial year, the growth again outpaced the global EMS industry. Over the years, VTech CMS has developed a strong reputation for its manufacturing know-how, flexible service, and proficiency in managing accounts with a high product mix and low to medium volumes.
Additionally, the design for manufacturing service we provide creates an additional competitive edge, giving customers a complete solution to their needs. Gains in market share is the second pillar for our strategy. As you have heard from Andy, we remain the world's largest manufacturer of cordless phones and the global number one player in electronic learning products. VTech CMS is one of the world's top 50 EMS providers. We continue to expand geographically with increasing footprint in markets such as Australia, China, Japan, Korea, as well as those in Latin America and the Middle East. Finally, operational excellence supports our profitability. We continue to invest in automation, process improvement, and product optimization to increase productivity. In the first half of this financial year, we have been able to deliver increased outputs with a smaller workforce. Ladies and gentlemen, this concludes my presentation.
I will now ask our chairman, Mr. Allan Wong, to share our outlook. Allan, please.
Thank you, King. Good afternoon, everyone, and hello to all of our viewers online. I now turn to our outlook for the second half of the financial year. Given the group's year-to-date financial results and the continued strong headwind from currency movements, management are expecting a stable revenue and lower gross margin year-on-year. ELP revenue is forecast to be slightly lower year-on-year. Sales of platform products are anticipated to decline as the business will continue to be affected by declining sales of educational children's tablets. To stabilize the platform business, as King mentioned earlier, we have introduced a range of innovative platform products in different form factors that is aimed to capture demand in different market segments. Following KidiZoom Smartwatch DX, a new multifunction handheld device called DigiGo, hit the shelves in the group's major European markets in late September.
Even more recently, InnoTV was rolled out in the U.S. and the Group's major European market in October. Sales of standalone products, in contrast, are forecast to grow further. The good sell-through of infant products and Go! Go! Smart Family is expected to continue, while KidiZoom Action Cam, Flipsies, and Baby Amaze will add incremental sales. Revenue from telephone products is expected to improve over the first half. Sales of residential phones are expected to remain slow, but commercial phones and other telecommunication products will continue to grow. Sales of ErisStation are forecast to accelerate in the second half. The full range reached U.S. shelves in July. This product has been very well received by customers and we are recruiting more resellers. ErisTerminal, meanwhile, is expected to grow steadily. Following the U.K. launch in September, we started shipping the VTech-branded ErisTerminals to markets in Middle East.
The product will also be rolled out to Eastern Europe later in the second half. In North America, the customer base for ErisTerminal will expand steadily, while the good momentum of the 4-Line Small Business Phone System will continue. In addition to this, the CAT-iq handsets will remain very good performance. Sorry. In other telecommunication products, the strong momentum in baby monitors will carry into the second half, supported by a new range to be rolled out in both the U.S. and Europe. The new ULE model will be unique to the market and is expected to stimulate growth further. IADs are forecast to remain on a positive trend while new wireless monitoring system will be shipped to U.S. and some Asian Pacific markets in the second half of the financial year. The good momentum in CMS is anticipated to continue.
Sales of professional audio equipment, hearables, and home appliances will increase as business with existing customer expands while new customers add to the demand. The switching mode power supplies business is expected to remain stable. Sales of solid-state lighting are expected to decline as the customers face strong competition. To cater for further expansion, a new manufacturing building for CMS commenced operation in July, adding 25% to the production capacity. In summary, it has been a steady start to the financial year 2016. Going forward, VTech will continue to focus on product innovation, increasing market share, expanding geographically, and pursuing operational excellence to enhance shareholder value.