Trading firm Li & Fung Ltd on Wednesday reported a 21.7 per cent hike in first net profit and revealed it is close to scooping a licensing deal with Levi Strauss & Co and hunting acquisitions.

The company, which manages supply chains for companies such as Abercrombie & Fitch, Limited Brands and Reebok, posted a net profit of HK$414 million (US$53m) versus HK$340m in the same period of 2002.

Revenue jumped 26.5 per cent to HK$18.1 billion from HK$14.3bn on the back of market share gains and its acquisition of Janco Overseas Ltd, a buying agent for US supermarkets.

It added it is close to signing a deal with US jeans giant Levi Strauss & Co which will see it design, make and market clothing under the Levi Strauss Signature label in the US for the autumn of 2004.

"Judging from orders on hand and indications from our customers, we anticipate that the pace of double-digit increases in turnover will continue in the second half," group managing director William Fung said.

He addd: "This year the company will definitely have some acquisitions."