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 September 2016. 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 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; 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 operation and talk about our recent acquisition of Snom. Finally, Mr. Pang will give the management's outlook for the coming period.
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, [Rowena]. Good afternoon, ladies and gentlemen, and viewers online. First of all, I would like to share with you the financial highlights of the group for the six months ended 30th of September 2016, compared with the same period of the last year. As you see from the slide, the revenue of the group rose by 5.9% to $982.9 million . The increase in revenue was mainly driven by the higher sales in North America, Europe, and Asia-Pacific, which offset the decrease in revenue in other regions. The acquisitions of LeapFrog on 4th of April 2016 also contributed to the sales growth compared with the same period of the last year. Our gross profit rose by 9.7% to $313.8 million , and our gross profit margin also improved from 30.8% to 31.9%.
The increase in gross profit and gross profit margin was mainly attributable to the gross profit contribution from LeapFrog. Cost of materials as a percentage of the group's revenue remained largely stable compared with the same period of the last year. As for the direct labor cost and manufacturing overheads, they were lower than the same period of the last year as the group continued to reduce workforce through automations and process improvement. The renminbi also depreciated against U.S. dollar during the period. Our operating profit reduced by 28.6% to $79.3 million . Our operating profit margin also reduced from 12% to 8.1%. The reduction in operating profit and operating profit margin was mainly due to the increase in total operating expenses arising from the consolidation of LeapFrog and the associated restructuring costs incurred during the first half of the financial year.
Our administrative expenses in the first half of the financial year also include the expenses related to the cyberattack happening in November 2015 and the investigation conducted by the U.K. Competition and Markets Authority since April 2016. Our profit attributable to shareholders reduced by 28.7% to $71.4 million. Our net profit margin also reduced from 10.8% to 7.3%. As a result, our basic earning per share reduced by 28.8% to $0.284. Our Board of D irectors has declared an interim dividend per share of $0.17, same as the interim dividend per share of the last financial year. Turning to the revenue by region, North America remained the largest market of the group, accounting for 48.3% of the group's revenue. Our sales in North America rose by 2.8% to $474.4 million.
The increase in revenue was mainly due to the higher sales of our electronic learning products, which offset the lower sales of telecom products and Contract Manufacturing Services. Our sales to European market rose by 10.4% to $412.6 million. The sales growth in Europe was driven by the higher sales of our electronic learning products and Contract Manufacturing Services, which offset the decrease in revenue of our telecom products. In Asia-Pacific region, the revenue of the group rose by 17.1% to $69.9 million. The increase in revenue was due to the increase in sales of all our three product lines. Other regions include Latin America, Middle East, and Africa. The group's revenue in other region reduced by 21.5% to $26 million.
The decrease in sales in other regions was mainly due to the lower sales of our telecom products and Contract Manufacturing Services, which offset the higher sales of our electronic learning products. Our stock balance as at 30 of September, 2016 increased from $367.9 million to $390.5 million compared with the same period of the last year. Our stock turnover days, however, reduced from 115 days to 110 days. The highest stock level was mainly to cater for the higher demand of the group's product in the second half of the financial year and the seasonality of most of the group's business. We had also arranged early production of the group's product in order to better utilize our production capacity. Our trade debtors balance as at 30 of September, 2016 increased from $395.5 million to $423.1 million.
Our trade debtors turnover day, however, reduced slightly from 61 days to 60 days compared with the same period of the last year. The increase in debtors balance was mainly due to the increase in revenue in the first half of the financial year and the seasonal nature of the group's business. Our financial position remains very strong. We were debt-free, and our net cash balance as at 30 of September, 2016 was $104.4 million, as compared to $104.9 million for the same period of the last year. That's all of my presentation. I will now invite Mr. Andy Leung to share with you our operations review. Mr. Leung, please.
Thank you, Shereen. I will start by looking at cost first. The gross margin of the first six months of fiscal year 2017 was increased over the same period last year. Cost of material as a percentage of group revenue was largely unchanged. Direct labor cost and manufacturing overhead declined as wages in our factory in China held steady and the renminbi depreciated against the U.S. dollar. We again increased efficiency by reducing the workforce through process automation and improvement. Turning to our operations, I will begin as usual from North America. Group revenue in North America in the first six months of the fiscal year 2017 increased by 2.8% to $474.4 million as higher sales of ELP offsets lower sales of telecommunication product and CMS. North America remained our largest market, accounting for 48.3% of the group revenue. Talking about the ELP first.
The revenue of ELP in North America rose by 26.2% to $187.6 million. Sales of LeapFrog products were consolidated into VTech following completion of acquisition on 4th of April, 2016. Overall, sales of both standalone and platform product increased, and we maintained our position as the number one manufacturer of electronic learning product from infancy through toddler and preschool in the U.S. In the standalone product, growth was driven by the core infant and toddler products. This was augmented by the launch of new Go! Go! Smart family product, which were well-received by the market. The sale growth in platform product was driven by the launch of a new product and the combined VTech and LeapFrog educational tablet offerings. The new Touch & Learn Activity Desk Deluxe hit the shelf of U.S. retailer in August 2016.
It features an interactive desktop and activity card filled with engaging content, including letters, numbers, music, and colors. This product had been very positively received and have made all the major holidays toy list. The LeapFrog brand introduced to the market a new interactive learning system called LeapStart, which helped children acquire a range of school and life skill. Revenue from the telecommunication product in North America decreased by 9.0% to $182.1 million. Although sales of commercial phone and other telecommunication product were on upward trend, this was offset by lower sales of residential phone. Sales of residential phone continues to be impacted by the decline in fixed line telephone market. Order were also affected as some major retailer tightened inventory management. However, we increased our market share further and maintained our number one position in the U.S. residential phone market.
Commercial phone and other telecommunication product posted good growth during the first six months. Baby monitor had the strongest performance, driven by new product launch, strong sell-through, and increased product placement. ErisStation, our SIP-based business phone system, saw sales increase as distribution channel were expanded. Sales of hotel phone rose as our reputation in the hospitality sector continued to grow, which is enabling us to increase our market share and secure new projects. New Bluetooth headset specially designed for the professional trucker market boosted sales of cordless headset, while ErisStation, our conference phone with wireless microphone, saw steady growth. CMS revenue in North America decreased by 7.1% to $104.7 million. The decline was a result of lower sales of professional audio equipment and communication product, which offsets higher sales of solid-state lighting and home appliance.
Professional audio equipment experienced lower sales because of an excess inventory issue and the delay of new product launch by a customer. Sales of communication product declined because of lower order for a home security system from an existing customer. In contrast, solid-state lighting recorded a sales increase as there was sales contribution from a new customer. An existing customer transferring the production of a new series of product to us also support growth. Sales of home appliance rose as there was increased demand from existing customer. The industrial product business was stable during the period. Looking now at Europe. Group revenue in Europe in the first six months of the fiscal year 2017 was up by 10.4% to $412.6 million as higher ELP and CMS sales offset a decline in telecommunication products. Europe is the second-largest market of the group, representing 42% of the group revenue.
ELP revenue in Europe increased by 11.8% to $144.5 million. Growth was recorded in all our key European markets, namely U.K., France, Germany, the Netherlands, and Spain. During the first nine months of the calendar year 2016, we further strengthened our position as the number one infant and toddler toys manufacturer in France, the U.K., Germany, Belgium, and the Netherlands. Sales of standalone products in Europe grow, l ed by the core infant, toddler, and preschool product. There were higher sales of KidiZoom camera and the Kidi line. While sales of the Toot-Toot family of product were stable, and KidiZoom Action Cam saw sales decline. Platform product also record growth. Sales of children educational tablet increased with the addition of LeapFrog brand tablets, while the introduction of the DigiGo in late September 2015 add incremental sales.
During the first six months of the fiscal year 2017, we start rolling out the second generation of KidiZoom Smartwatch to all our major Western European markets. The LeapFrog brand LeapStart also hit shelf in the U.K. in July 2016. Telecommunication product revenue in Europe decreased by 15.3% to $63 million as a result of lower sales of residential phone, commercial phone, and other telecommunication products. Sales of residential phone declined as the fixed-line telephone market contract further, and the weak euro reduced the purchasing power of our customer. In commercial phone and other telecommunication product, sales of CAT-iq handset were lower as a key customer changes sales and marketing strategy on product bundling. While sales of SIP phone, baby monitor, and integrated access device were affected by the delayed launch of new product by customer.
During the first half of this fiscal year, we started shipping fixed-line telephone specially designed for the hearing impaired to several European customer, tapping the demand of this unfulfilled market. CMS revenue in Europe rose 20.6% to $205.1 million on broad-based growth, offsetting slightly lower sales of home appliance and the communication products. Significant sale growth of hearable was mainly due to the successful launch of the world's first wireless smart earphone by a new customer. Sales also benefit as customer product were well received by the market. In professional audio equipment, more order were secured for USB audio interface product, offsetting a reduction in demand for mixer. Switching mode power supply saw a temporary boost in sales despite the customer change of ownership.
Industrial product were supported by higher sales of smart meter in the U.K. market as utility supplier, backed up by the government regulation, began to encourage household to install the unit to track their consumption patterns. During the first six months, we start shipping hearing aid product to a European customer, which drove growth in medical and health product. Group revenue in Asia Pacific increased by 17.1% to $69.9 million in the first six months of the fiscal year 2017, as sales of all product line grew. The region account for 7.1% of the total group revenue. ELP revenue in Asia Pacific was up by 17.9% to $24.4 million, driven by sales increases in Australia, Korea, which offset decline in China and Japan. Australia posted significant growth on stronger sales and marketing effort, following the establishment of our own sales office in the country.
The core infant product also make a contribution. Sales in Korean market benefit from more product launch and an increased sales effort. In China, sales in local currency terms show minor growth, but retreat slightly in U.S. dollar term due to the depreciation of renminbi. Sale to Japan was affected by excess inventory at one customer. Telecommunication product revenue in Asia Pacific increased by 0.6% to $16.6 million a s higher sale in China and India offset lower sale in Australia, while those to Japan were stable. In China, we began shipping our hotel phone to one of the top luxury hotel chain, while in India, we won more order for cordless telephone from a key customer. Sale decline in Australia due to the contraction of the market for fixed-line telephone, but we continue to gain market share. CMS revenue in Asia Pacific grew by 28.4% to $28.9 million.
Higher sale were record for home appliance, medical and health product, solid-state lighting, and professional audio equipment. Sales of hearable and communication product register a decline. Home appliance benefit from a good sale through of a customer product, while the medical and health product business was boosted by higher sales of part of ultrasonic machine. The sales growth of solid-state lighting was driven by increased demand in China. Professional audio equipment saw increased order from existing customer. Finally, we look at other region, which include Latin America, the Middle East, and Africa. In the first half of this fiscal year 2017, revenue from other revenue fell by 21.5% to $26 million. As higher sales of ELP were insufficient to offset the declines in telecommunication product and CMS. Other region represent 2.6% of the group revenue. ELP revenue in the other region rose by 6.8% to $9.4 million.
Higher sales were achieved in the Middle East and Africa, offsetting a sale decline in Latin America. Telecommunication revenue in other region declined by 31.6 % to $16.2 million because of lower sales in Latin America, the Middle East, and Africa. CMS revenue in other region was $0.4 million as compared to $0.6 million in the same period of last year. As many of you have read, last month, we announced an acquisition. We entered into a binding definitive agreement to acquire 100% of the share capital of Germany's Snom Technology. The consideration is approximately $15 million. The transaction will be financed through internal resources and is subject to the approval of the relevant regulatory authorities. Snom is the pioneer and leading brand of professional and enterprise voice over IP telephone.
The main synergy of the acquisition are in hardware, software development, expanded sale channel in voice over IP telephony, and improvement in operational efficiency. Thank you. That conclude my part of the presentation. I will now hand it over to King for the outlook. King, please.
Thank you, Andy. Good afternoon, ladies and gentlemen. First, the top line. For the second half of the financial year, we expect the good momentum of ELP and CMS to continue and s ales of telecommunication products to pick up. Overall, we are expecting group revenue to increase for the full financial year. Profitability is also expected to improve in the second half on higher group revenue and with the bulk of the LeapFrog integration cost already incurred in the first half. Starting with ELPs. ELPs revenue is forecast to increase year-on-year. Sales of both standalone and platform products are expected to grow. Standalone products, supplemented by LeapFrog branded products, will continue the positive trend for infant, toddler, and preschool standalone products.
Growth in standalone products will also be supported by the award-winning Go! Go! Smart family, especially from the expanded Go! Go! Smart Friends line and the newly launched Go! Go! Smart Sea World line. New products in the Kidi and the Little Love lines will further add to growth. Platform products. Sales of platform products will be supported by a broadened portfolio comprising both VTech and LeapFrog branded products, including educational tablets from both brands.
VTech branded platform sales will be driven by the Touch & Learn Activity Desk Deluxe, as well as by the European launch of the second-generation KidiZoom Smartwatch, and finally, by the DigiGo handheld platform. For the LeapFrog brand, the newly launched LeapStart is expected to do well, and it will be augmented by the continuation of the LeapReader family. Moving next to telecoms. We'll expect sales of telecommunication products to pick up in the second half, driven by higher growth in commercial phones and other telecommunication products.
In commercial phones, the newly acquired Snom will make an immediate contribution to our worldwide revenue. The business will be further enhanced by the shipment of SIP terminals to a major Korean customer, starting in the fourth quarter. Sales of CAT-iq handsets will also increase, as shipment to one of the largest U.S. wireless service provider will commence in the second half. For hotel phones, as we gain further market share and launch new products, sales are expected to grow. Sales of other telecommunication products are expected to increase. For baby monitors, U.S. sales will grow further. This is driven by increased product listing and by the launch of new products, including one that features a cutting-edge video technology. We will also be introducing VTech-branded baby monitors in Eastern Europe, while higher shipment to Western Europe is expected.
For wireless monitoring systems, sales will benefit from the expansion of our product range. We will be introducing our first remote access IP camera in the U.S. in the fourth quarter. For integrated access devices, shipment to Europe will return to growth in the second half. Finally, residential phones. The residential phones market will unfortunately remain slow worldwide. This notwithstanding, we are on track to further increase our market share in both North America and Australia. Finally, CMS. The good performance of CMS will continue, although growth in the second half, it is expected to moderate slightly. The professional audio business should stabilize as our customer's excess inventory has been resolved. The positive trend for our hearables business will continue as our customers' products continue to perform well in the market.
Our industrial product business will increase, thanks, as we heard from Andy, to a policy in the U.K. for households to install smart meters. Our solid- state lighting business will be supported by orders from a new customer, and as we heard from Andy, by having won over a new product series from an existing customer. In the medical and health category, we are moving upstream from previously manufacturing ultrasound machine parts to producing complete ultrasound machines for a customer in Japan. Naturally, this will boost sales. However, our switching mode power supplies business will continue to face uncertainty due to ownership change of a customer. On the organization side, as our business increases for hearing aids and other medical and health products, new strategic business units have been set up to manage the expected growth in these areas.
Finally, in our last annual results report, we announced that our CMS has acquired the fixed assets of a company that manufactures high-precision metal tooling and parts. Contribution from this acquisition will start to come in in the fourth quarter. Ladies and gentlemen, this concludes our presentation.