Sales increased by 27.1% over the same period of the previous financial year to $713.8 million.
Despite higher raw material prices and labour costs having a negative impact on the Group's gross margin, profit attributable to shareholders rose by 42.1% to $65.8million.
Earnings per share increased by 37.3% to 27.6 cents, compared to 20.1 cents in the corresponding period last year.
In view of the continued growth in profitability and the group's solid financial position, the board of directors has declared an increased interim dividend of 9.0 cents per ordinary share, together with a special dividend of 30.0 cents per ordinary share to commemorate Vtech's 30th anniversary.
"Vtech posted a solid increase in both revenue and profit for the firsthalf of the financial year 2007," said Mr. Allan Wong, chairman and group CEO of Vtech Holdings.
"The drivers were a strong increase in revenue at thecontract manufacturing services (CMS) business, continued across-the-board growth at the electronic learning products (ELP) business, and a rebound in the US market for the telecommunication products (TEL) business, following the successful restructuring of the past two years."