Financial Performance - Group sales increased by 11.7% to HK$1,877 million (2021: HK$1,681 million) due to notable sales recovery in Southeast Asia and the Gulf Cooperation Council[6]. - Operating profit rose significantly by 76.6% to HK$166 million (2021: HK$94 million) driven by increased sales and reduced operating expenses[5]. - Net profit attributable to shareholders was HK$97 million (2021: HK$60 million), reflecting a 61.7% increase[5]. - Basic earnings per share increased by 60.5% to 6.1 HK cents (2021: 3.8 HK cents)[5]. - Gross profit rose by 7.9% to HK$1,035 million, with a gross profit margin of 55.1%[12]. - Profit after income tax attributable to shareholders increased by 61.7% to HK$97 million, compared to HK$60 million in 2021[12]. - The Group's gross margin decreased by 1.9 percentage points, while gross profit increased by 7.9% due to higher sales and average selling prices[16]. - Profit before income taxes for the six months ended June 30, 2022, was HK$179 million, an increase from HK$105 million in 2021, representing a growth of 70.5%[76]. Dividends - The Board of Directors declared an interim dividend of 8.5 HK cents per share (2021: 6.5 HK cents), representing a 30.8% increase[5]. - Proposed dividends for the period were HK$134 million, compared to HK$158 million in the previous year, a decrease of 15.2%[71]. - The Group's dividend policy aims to return surplus cash to shareholders while retaining adequate reserves for future growth[187]. - The Group's financial position and future expansion plans were considered in the decision to increase the interim dividend[187]. Sales and Market Performance - Online sales grew by 22.5%, now accounting for 11.0% of total group sales, up from 10.1% in 2021[13]. - Offline sales increased by 9.0%, despite a 5.6% reduction in the total number of stores[13]. - Wholesales to franchisees rebounded by 18.3%, reflecting recovery in overseas markets[13]. - Total sales in Greater China for the six months ended June 30, 2022, were HK$686 million, a decrease of 11.4% from HK$774 million in 2021[28]. - Total sales in Southeast Asia and Australia increased by 33.9% to HK$711 million, with a gross profit margin of 59.8%[35]. - The Gulf Cooperation Council (GCC) saw a sales increase of 26.0% to HK$325 million, with operating profit rising by 72.2% to HK$62 million[41]. Inventory and Cash Management - Inventory turnover on cost decreased by eight days to 116 days, despite total inventory increasing to HK$541 million (2021: HK$494 million)[6]. - Cash and bank balances, net of bank loans, were HK$910 million (2021: HK$932 million), reflecting a modest decline due to increased inventory[6]. - Cash and cash equivalents at the end of the period were HK$918 million, down from HK$1,022 million at the end of June 2021, a decrease of 10.2%[79]. - The company reported a decrease in inventories of HK$51 million and a decrease in trade and other receivables of HK$74 million, improving working capital management[76]. Operating Expenses and Efficiency - Operating expenses decreased by 1.9% to 47.6% of sales (2021: 54.1%), indicating improved efficiency[6]. - Other income and gains fell by approximately 50% to HK$23 million, attributed to reduced government subsidies and increased exchange losses[20]. - Finance expenses decreased to HK$12 million from HK$16 million in 2021, reflecting lower imputed interests on lease liabilities[23]. Store Operations - The number of stores at period end decreased to 1,940, down by 154 from the previous year[12]. - The total number of stores in Southeast Asia and Australia decreased to 561 from 572[39]. - The company maintained a strong brand image and effective marketing strategies to minimize sales declines in Taiwan[32]. Future Outlook - The company expects sales to begin recovering in the second half of the year following a substantial drop in Q1 due to the pandemic[32]. - The Group anticipates continued growth in the second half of 2022 despite global economic uncertainties[58]. - The Group anticipates a substantial increase in wholesales in the second half, supported by sustained sales recovery in developed franchise regions and ongoing expansion in emerging countries, including Africa[60]. Employee and Management - As of June 30, 2022, the Group had approximately 6,100 employees, an increase from 5,900 employees on June 30, 2021[61]. - The Group is investing heavily in training for sales and customer service, management, planning, and leadership development[61]. Financial Position - Total current assets decreased to HK$1,875 million from HK$2,082 million, a decline of 9.9%[69]. - Total liabilities reduced to HK$1,453 million, down from HK$1,645 million, indicating a decrease of 11.7%[71]. - Total equity attributable to shareholders decreased to HK$2,287 million from HK$2,402 million, a decline of 4.8%[71]. Risk Management - The Group's activities expose it to various financial risks, including foreign exchange risk, credit risk, liquidity risk, and cash flow interest rate risk[87]. - The Group's overall risk management program aims to minimize potential adverse effects on financial performance, utilizing derivative financial instruments when necessary[87].

Financial Performance - Sales for 2021 were HK$3,380 million, an increase of 8.3% from HK$3,122 million in 2020[4] - Gross profit for 2021 was HK$1,930 million, representing a gross margin of 57.1%, up from 55.6% in 2020[4] - Operating profit for 2021 was HK$263 million, compared to an operating loss of HK$105 million in 2020, marking a significant turnaround[4] - EBITDA for 2021 was HK$811 million, with an EBITDA margin of 24.0%, compared to 17.8% in 2020[4] - Profit attributable to shareholders for 2021 was HK$190 million, a recovery from a loss of HK$112 million in 2020[4] - Earnings per share for 2021 were HK$12.00, compared to a loss per share of HK$7.10 in 2020[4] - Profit after income taxes for the year was HK$223 million, compared to a loss of HK$108 million in the previous year[171] - Total comprehensive income for the year was HK$193 million, a turnaround from a loss of HK$84 million in 2020[171] Store Operations - The number of stores worldwide at year-end 2021 was 2,056, with 1,134 directly operated stores and 922 franchised stores[4] - The total number of stores worldwide at year-end was 1,134, with 875 direct-operated stores and 259 franchised stores[6] - The number of stores at year-end in Greater China was 975, down from 1,030 in 2020[28] - The total number of stores in Mainland China at year-end was 739, down from 784 in 2020[33] - The number of franchised stores decreased from 383 in 2020 to 337 in 2021, with a temporary drop of 46 stores across all franchise markets[43] Liquidity and Financial Position - The total assets as of year-end 2021 were HK$4,208 million, while total liabilities were HK$1,645 million[4] - The current ratio for 2021 was 1.9 times, indicating a stable liquidity position[4] - Cash and bank balances, net of bank loans, were HK$875 million, down from HK$1,104 million in 2020[13] - Net current assets improved to HK$960 million in 2021, compared to HK$916 million in 2020[174] Dividends and Shareholder Returns - The dividend payout ratio for 2021 was 137.5%, reflecting a strong commitment to returning value to shareholders[4] - The Board of Directors recommended a final dividend of 10.0 HK cents per share, up from 6.9 HK cents per share in 2020, totaling HK$158 million if approved[13] - Proposed dividends for the year amounted to HK$158 million, an increase from HK$109 million in 2020[174] - The final dividend proposed for the year ended December 31, 2021, is HK$0.10 per share, up from HK$0.069 per share in 2020, totaling HK$0.165 per share for 2021 compared to HK$0.10 per share in 2020[55] Online Sales Performance - Online sales surged by 25.5%, contributing 12.1% to total sales, compared to 10.5% in 2020[13] - Online sales in Mainland China grew by 12.8%, contributing approximately 40% to total sales, up from 36% in 2020[30] - The company experienced a 29% year-over-year increase in online sales, primarily driven by third-party platform growth in Hong Kong and Macau[31] - Online sales in South Korea accounted for 35% of total sales, demonstrating stable performance despite pandemic disruptions[42] Operational Strategies and Future Outlook - The company plans to expand its market presence and invest in new product development to drive future growth[6] - The Group aims to continue improving its business and profitability despite the unpredictable future[12] - The Group plans to reduce new purchases in 2022 while utilizing existing inventory to navigate ongoing supply chain issues[12] - The Group is focused on upgrading the Giordano brand, achieving higher selling prices and gross margins[56] Corporate Governance - The Board is committed to maintaining the highest standard of corporate governance, emphasizing transparency, accountability, and independence to maximize shareholder value[65] - The Company has adopted the Corporate Governance Code as its governance framework, ensuring compliance with legal and regulatory requirements[65] - The Board plays a crucial role in decision-making regarding annual and interim results, notifiable transactions, and appointments of Directors[65] - The Company emphasizes the importance of maintaining high standards of corporate governance and transparency in its operations[60] Risk Management and Internal Controls - The Group's risk management and internal control systems were evaluated as sufficient and effective on a continuing basis[99] - The Management Committee is responsible for implementing business strategies and managing daily operations, fully accountable to the Board[96] - The internal audit team conducted independent audits covering significant business processes and activities, working with management to address identified control weaknesses[100] - The Company has implemented a "whistle-blowing" mechanism for employees to report misconduct anonymously[88] Financial Reporting and Audit - The independent auditor, PricewaterhouseCoopers, issued an unqualified opinion on the Group's consolidated financial statements for the year ended December 31, 2021, confirming compliance with Hong Kong Financial Reporting Standards[152] - The audit process involved communication with governance regarding the planned scope, timing, and significant audit findings[167] - The overall presentation, structure, and content of the consolidated financial statements were evaluated to ensure they fairly represent underlying transactions[166] - Sufficient and appropriate audit evidence was obtained regarding the financial information of the entities within the Group to express an opinion on the consolidated financial statements[166] Shareholder Engagement - The Company held approximately 7 meetings with institutional investors and research analysts in 2021 to communicate its business strategies and developments[106] - The Company has a diverse shareholder base, including institutional and retail investors, and actively engages with them[106] - The Company utilizes internet and electronic communication to provide timely and transparent information to shareholders[106] - The Company has established a shareholders' communication policy to enhance relationships with shareholders and ensure compliance with relevant rules[106]

Financial Performance - Group sales for the first half of 2021 were HK$1,681 million, representing a 19.0% increase compared to HK$1,413 million in 2020[6]. - Operating profit for the period was HK$94 million, a significant improvement from a loss of HK$182 million in 2020, marking a 151.6% change[5]. - Profit attributable to shareholders was HK$60 million, compared to a net loss of HK$175 million in the previous year, reflecting a 134.3% increase[5]. - Gross profit rose by 24.2% to HK$959 million, with a gross margin improvement of 2.4 percentage points to 57.0%[10][15]. - Profit after income taxes for the period was HK$77 million, compared to a loss of HK$182 million in the same period of 2020[59]. - The Group achieved a gross profit of HK$959 million for the six months ended June 30, 2021, compared to HK$772 million in the same period of 2020, reflecting a gross profit margin improvement[59]. - Operating profit improved significantly to HK$94 million, compared to an operating loss of HK$182 million in the previous year[10]. - The Group recorded an operating profit of HK$94 million for the first half of 2021, compared to an operating loss of HK$182 million in the same period of 2020[18]. - The profit after income taxes for the period was HK$60 million, contributing to a total comprehensive income of HK$51 million[64]. Sales and Market Performance - Online business sales grew by 21.6%, contributing 10.1% to total sales, with non-Mainland China platforms exceeding expectations with a 41.9% increase[12][14]. - Wholesale to franchisees recorded a 21.1% increase, driven by the reopening of stores after the relaxation of movement controls[12]. - Sales in Southeast Asia and Australia increased by 31.4% to HK$531 million, while sales in Mainland China rose by 21.1% to HK$362 million[10]. - Total sales for the six months ended June 30, 2021, were HK$728 million, a decrease of 2.0% compared to HK$743 million in 2020[25]. - Sales in Mainland China reached HK$332 million, a double-digit increase of 11.0% from HK$299 million in 2020, with a net addition of 15 franchised stores[31]. - Total sales for the Group reached HK$1,681 million, with Mainland China contributing HK$362 million, Hong Kong and Macau HK$177 million, Taiwan HK$235 million, Southeast Asia and Australia HK$531 million, Gulf Cooperation Council HK$258 million, and Wholesale to Overseas Franchisees HK$118 million[89]. Cost Management and Expenses - Operating expenses decreased by 2.9% to 54.1% of sales, down from 66.3% in 2020[6]. - Other income and gains decreased by 13.0% to HK$47 million, contributing 2.8% to total sales[10]. - The finance expense was HK$16 million, down from HK$22 million in 2020, mainly due to a reduction in imputed interest on lease liabilities[18]. - Cost of sales increased to HK$726 million in 2021 from HK$629 million in 2020, an increase of approximately 15.5%[100]. - Staff costs rose to HK$293 million in 2021, up from HK$286 million in 2020, reflecting a growth of about 2.4%[100]. Dividends and Shareholder Returns - The Board declared an interim dividend of 6.5 HK cents per share, an increase of 109.7% from 3.1 HK cents per share in 2020[5]. - Proposed dividends for the period were HK$103 million, compared to HK$109 million in the previous year[63]. - The declared interim dividend is 6.5 HK cents per share, an increase from 3.1 HK cents per share in 2020, representing a 109% increase[115]. - The dividend payment is scheduled for September 17, 2021, to shareholders on record as of September 9, 2021[171]. Cash Flow and Liquidity - Cash and bank balances, net of bank loans, were HK$932 million as of June 30, 2021, compared to HK$989 million in the same period of 2020[6]. - Net cash inflow from operating activities was HK$170 million for the first half of 2021, down from HK$231 million in the same period of 2020[68]. - Cash and cash equivalents at the end of the period were HK$1,022 million, a decrease from HK$1,101 million at the end of June 2020[69]. - The current ratio improved to 1.9, based on current assets of HK$1,946 million and current liabilities of HK$1,050 million[46]. - The total cash and bank balances decreased to HK$1,084 million as of June 30, 2021, from HK$1,256 million as of December 31, 2020, a decrease of 13.7%[116]. Inventory and Receivables Management - Inventory turnover on cost decreased by 14 days to 124 days, attributed to increased sales and stable inventory levels[6]. - Trade receivables turnover days decreased by 13 days to 35 days, attributed to better credit control and a strategy to avoid loading franchisees' inventories[50]. - Trade payables turnover days decreased by 18 days to 23 days due to a faster payment schedule to long-term vendors to alleviate financial stress from the Covid-19 pandemic[50]. - The ageing analysis of trade receivables shows that amounts overdue by 0-30 days decreased from HK$162 million to HK$85 million, a reduction of 47.5%[118]. Corporate Governance and Management - The Group's management committee includes the Chairman and Chief Executive, Lau Kwok Kuen, and other executive directors[199]. - The Audit Committee is chaired by Barry John Buttifant, with other members including Kwong Ki Chi and Alison Elizabeth Lloyd[199]. - The Group has maintained a strong corporate governance structure to ensure effective oversight of management[194]. - The Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2021, has been reviewed by PricewaterhouseCoopers[198]. Future Outlook and Strategic Plans - The Group expects enhanced profitability in the coming years due to better sales, improved gross margins, and further rental reductions[18]. - Management anticipates further increases in the proportion of franchised stores, which currently account for over two-thirds of total stores[30]. - The company plans to search for better store locations with realistic rental arrangements, particularly in Hong Kong and Macau[51]. - The Group's strategy includes managing its retail and distribution segments geographically and by brand, focusing on expansion in the Asia Pacific and Gulf Cooperation Council regions[88].

Financial Performance - Group sales declined by 44.4% to HK$1,413 million for the six months ended June 30, 2020, compared to HK$2,542 million in 2019[4]. - The Group recorded a net loss of HK$175 million, a significant decrease from a net profit of HK$161 million in the same period of 2019[5]. - EBITDA decreased by 70% to HK$188 million, down from HK$618 million in the previous year[4]. - The gross margin for the Group was 54.6%, down from 59.3% in 2019[5]. - Operating loss was HK$182 million, a significant decline compared to an operating profit of HK$259 million in 2019[10]. - Loss attributable to shareholders was HK$175 million, compared to a profit of HK$161 million in the prior year, marking a 208.7% change[10]. - Total comprehensive loss for the period was HK$228 million, compared to a comprehensive income of HK$183 million in the previous year[58]. - The Company reported a loss after income taxes for the period of HK$175 million, contributing to a total comprehensive income of HK$(212) million[61]. Sales and Revenue - Online sales increased to HK$139 million, representing 9.8% of total sales, compared to 5.2% in 2019[5]. - Physical store sales dropped to HK$1,075 million, accounting for 76.1% of total sales, down from 82.7% in 2019[12]. - Total sales in Greater China for the six months ended June 30, 2020 were HK$754 million, down 39.7% from HK$1,251 million in 2019[26][32]. - Total sales in the rest of Asia Pacific were HK$419 million, down 48.1% from HK$807 million in 2019[34][35]. - Sales in Mainland China were HK$299 million, down from HK$529 million in 2019, reflecting a decline of approximately 43.4%[89]. - Sales in HKSAR and Macau totaled HK$309 million, a decrease from HK$561 million in 2019, representing a decline of about 44.8%[89]. - The Group's sales have gradually started to recover following the improvement of the situation in the areas where it operates, post-June 30, 2020[157]. Inventory and Cash Management - Inventory turnover days increased to 138 days, up from 92 days in the previous year[5]. - Cash and bank balances, net of bank loans, were HK$989 million as of June 30, 2020, compared to HK$994 million on December 31, 2019[5]. - Net cash inflow from operating activities was HK$231 million, a decline of 56.7% compared to HK$533 million in the previous year[64]. - Cash and cash equivalents at the end of the period were HK$1,101 million, down from HK$1,265 million at the end of June 2019[65]. - Trade receivables turnover days were 48 days, an increase of 6 days compared to the same period last year[50]. - Inventory at period end was HK$486 million, down 7.6% from HK$526 million in the previous year[10]. Operational Changes and Strategies - The Group plans to focus on rental reduction and technology-based improvements to enhance operational efficiency[18]. - The Group plans to close underperforming stores and allocate more resources to online and franchise businesses[51]. - The Group is expediting digitization of its business operations to prepare for a rebound[51]. - The Group's initiative to develop local online businesses has proven successful, with plans for continued deep localization[51]. - The Group is investing heavily in training for sales, customer service, management, and leadership development[51]. Market Conditions and Challenges - The COVID-19 outbreak and prolonged Sino-US disputes severely impacted consumer sentiment across the Greater China region[27][28]. - The Group anticipates a challenging operating environment in the second half of the year due to the COVID-19 pandemic and Sino-US relationship uncertainties[51]. - The Group is still assessing the impact of the COVID-19 outbreak on its performance for the second half of 2020 and is currently unable to estimate the quantitative impacts[157]. Dividends and Shareholder Returns - The Board declared an interim dividend of 3.1 HK cents per share, down from 10.2 HK cents per share in 2019[5]. - The company aims to return surplus cash to shareholders through dividends and share repurchases, aligning with its dividend policy[158]. - The board has considered the economic outlook and the group's financial position before declaring the interim dividend[158]. Employee and Management Information - The Group had approximately 6,600 employees as of June 30, 2020, down from 7,900 employees on December 31, 2019[51]. - The Group's management has taken voluntary pay cuts to show solidarity with stakeholders[51]. - The company has complied with all applicable code provisions under the Corporate Governance Code, except for specific deviations regarding the roles of the chairman and chief executive[182]. Future Outlook - The company anticipates a stable economic environment, which will support its growth strategy and operational goals for the upcoming year[193]. - Giordano plans to open 20 new retail locations across Asia by the end of the fiscal year, aiming to increase market penetration by 5%[193]. - The company is investing in new product lines, with a budget allocation of HKD 50 million for research and development in innovative apparel technologies[193].

Financial Performance - Sales for 2019 were HK$4,852 million, a decrease of 11.9% from HK$5,509 million in 2018[4] - Gross profit for 2019 was HK$2,846 million, resulting in a gross margin of 58.7%, slightly down from 59.0% in 2018[4] - Operating profit decreased to HK$397 million in 2019, with an operating margin of 8.2%, compared to 11.3% in the previous year[4] - EBITDA for 2019 was HK$1,183 million, with an EBITDA margin of 24.4%, down from 14.9% in 2018[4] - Profit attributable to shareholders was HK$230 million, representing a decrease of 52.1% from HK$480 million in 2018[4] - Total comprehensive income for the year was HK$282 million, a decrease of 39.5% from HK$467 million in 2018[188] - Profit after income taxes for the year was HK$289 million, representing a 46.6% decrease from HK$542 million in 2018[188] - Earnings per share attributable to shareholders decreased to HK$14.6 cents, down from HK$30.5 cents in 2018[186] Store Operations - The total number of stores worldwide at year-end was 2,375, a slight decrease from 2,426 in 2018[4] - The number of stores at year-end decreased by 41 to 1,172 in Greater China[42] - The number of franchised stores in Mainland China increased slightly to 641 from 639 in 2018[17] - The number of directly-operated stores (DOS) in Taiwan decreased to 197 from 200 in 2018[17] - The total number of stores in the Middle East at year-end was 181, a slight decrease from 182[49] Market Conditions - The global economic growth slowdown that began in 2018 rapidly deteriorated in 2019, significantly impacting the retail and hospitality industries, leading to weak performance for the Company[9] - Group sales decreased by 11.9%, or by 11.1% at constant exchange rates, significantly impacted by macro factors such as the Sino-US trade dispute and regional social events[22] - E-commerce revenue generated HK$267 million, representing a decrease of 15.0%, primarily due to unsatisfactory performance in Mainland China[22] Financial Position - The company reported a current ratio of 1.4 times, down from 2.5 times in 2018[4] - The market capitalization at year-end was HK$3,709 million, compared to HK$5,840 million in 2018[4] - Total assets as of the end of 2019 were HK$5,196 million, while total liabilities were HK$2,349 million[6] - Cash and bank balances, net of bank loan, were HK$994 million on December 31, 2019[15] - The retained profits at the end of 2019 were HK$1,069 million, down from HK$1,267 million in 2018, indicating a decrease of about 15.6%[198] Corporate Governance - The Company has adopted the Corporate Governance Code as stated in Appendix 14 to the Listing Rules on the Stock Exchange[70] - The Board is responsible for setting the Group's overall objectives and strategies, monitoring financial performance, and reviewing corporate governance standards[70] - The Company has established three Board Committees: the Audit Committee, the Nomination Committee, and the Remuneration Committee, along with a Management Committee and a Risk Management Committee[76] - The Board is committed to excellence in corporate governance and has implemented policies and practices to ensure compliance with legal and regulatory requirements[72] Dividend Policy - The dividend payout ratio for 2019 was 100.0%, consistent with the previous year[4] - The final dividend recommended is 4.4 HK cents per share, down from 16.5 HK cents per share in 2018, totaling 14.6 HK cents per share for 2019[62] - Proposed dividends for the year were HK$69 million, a decrease from HK$260 million in 2018[189] Employee Management - As of December 31, 2019, the Group had approximately 7,900 employees, a decrease from 8,200 employees on December 31, 2018[64] - Employee sacrifices, including voluntary pay reductions, were acknowledged as crucial for navigating difficulties[14] - The Group offers competitive remuneration packages and generous, goal-oriented bonuses targeted to different levels of staff[64] Strategic Focus - The company plans to focus on market expansion and new product development in the upcoming year[4] - Management plans to expand wholesale and franchise businesses in developing markets, with store openings expected in India and Kenya in 2020[24] - The Company continues to focus on operational factors within its control while adapting to market changes[12] Audit and Compliance - The independent auditor, PricewaterhouseCoopers, has issued an unqualified opinion on the Group's financial statements for the year[169] - The Audit Committee is responsible for the appointment, re-appointment, and removal of external auditors, as well as reviewing the Group's financial information and overseeing risk management and internal control systems[97] - The Company has arranged appropriate directors' and officers' liability insurance in line with the Corporate Governance Code[91] Risk Management - The Group's risk management and internal control systems are evaluated for adequacy and effectiveness on an ongoing basis[104] - The Risk Management Committee is fully accountable to the Board for providing assurance on managing and monitoring the systems of risk management and internal controls[104] Shareholder Communication - The Company utilizes internet and electronic communication to provide timely and transparent information to shareholders[112] - The Board has established a shareholders' communication policy to enhance relationships with shareholders and ensure compliance with relevant rules[112]

Financial Performance - Group sales for the six months ended June 30, 2019, were HK$2,542 million, a decrease of 11% compared to HK$2,860 million in 2018[4] - Operating profit for the same period was HK$259 million, down 26% from HK$348 million in 2018[4] - Profit attributable to shareholders decreased by 36.6% to HK$161 million, compared to HK$254 million in 2018[4] - The gross margin for the group was 59.3%, with comparable store gross profit down by 8.9% and comparable store sales down by 8.6%[5] - Group sales decreased by 11.1% to HK$2,542 million, with a 9.1% decline at constant exchange rates[12] - Sales in the Greater China region dropped by 17.3%, significantly impacting overall performance[12] - E-business revenue was HK$132 million, down 19.0%, accounting for 5.2% of total sales[13] - Physical store sales recorded an 8.9% decline, while wholesale sales to franchisees fell by 20.8%[14] - Gross profit decreased by 11.0% to HK$1,508 million (2018: HK$1,694 million), primarily due to a volume decrease of 9.3%, despite an increase in average selling price and a decrease in average product cost[17] - Profit after income taxes attributable to shareholders decreased by 36.6% to HK$161 million (2018: HK$254 million), with a net margin of 6.3%[28] - Total sales for the six months ended June 30, 2019, were HK$1,297 million, down 14.3% from HK$1,513 million in 2018[37] - Operating profit for the same period was HK$54 million, a significant decrease of 61.2% compared to HK$139 million in 2018[35] - Total sales for the six months ended June 30, 2019, were HK$343 million, representing a 2.1% increase from HK$336 million in 2018[41] - Gross profit increased by 8.3% to HK$222 million, with a gross margin of 64.7%[41] - Operating profit rose by 36.0% to HK$68 million, with an operating margin of 19.8%[41] - The Group's total inter-segment sales were HK$599 million, down from HK$641 million in 2018, reflecting a decrease of approximately 6.6%[116] - The profit attributable to shareholders for the six months ended June 30, 2019, was HK$161 million, a decrease of 36.5% compared to HK$254 million in 2018[124] Store Operations - The total number of stores decreased by 20 to 2,424 as of June 30, 2019[6] - The number of franchised stores in Mainland China increased to 636 from 612 in 2018, while directly operated stores decreased to 281 from 326[7] - The total number of stores at the end of the period was 1,196, a decrease of 24 stores from 1,220 in 2018[37] - Total stores across all markets decreased from 434 to 427, with Southeast Asia showing a slight increase in store count from 225 to 228[47] - The number of stores in South Korea decreased from 191 to 179, reflecting a reduction of 12 stores[45] Cash and Liquidity - Cash and bank balances, net of bank loans, were HK$1,026 million as of June 30, 2019[5] - The net cash and bank balances at period end were HK$1,026 million, a decrease of 16.2%[12] - Cash generated from operations increased to HK$616 million in 2019, up from HK$486 million in 2018, reflecting a growth of 26.8%[68] - Cash and cash equivalents at the end of the period were HK$1,265 million, slightly down from HK$1,249 million in 2018[70] - Cash and cash equivalents increased to HK$1,265 million as of June 30, 2019, compared to HK$1,142 million as of December 31, 2018, representing an increase of 10.8%[144] - Current ratio decreased to 1.5 based on current assets of HK$2,264 million and current liabilities of HK$1,486 million (2018: 2.4)[48] Inventory Management - Inventory turnover days increased to 92 days from 77 days in 2018[4] - Inventory at period end was HK$526 million, with an inventory turnover of 92 days[12] - Group inventories increased by HK$27 million, or 5.4%, to HK$526 million (June 30, 2018: HK$499 million), primarily consisting of winter stock[49] - Management will closely monitor inventory levels to avoid an inventory glut, which could negatively impact future gross profit[49] Dividends and Shareholder Returns - The interim dividend per share was HK 10.2 cents, a decrease of 40% from HK 17.0 cents in 2018[4] - Proposed dividends for the period were HK$161 million, down from HK$260 million in the previous year, a decrease of 38.0%[64] - The company aims to return surplus cash to shareholders through dividends and share repurchase, aligning with its dividend policy[169] - The interim dividend is payable on September 20, 2019, to shareholders listed on the register as of September 12, 2019[169] Market Performance - Sales in the Greater China region dropped by 17.3%, significantly impacting overall performance[12] - Sales in Mainland China accounted for 20.8% of total sales but only contributed 1.1% to operating profit, highlighting challenges in profitability[23] - The Greater China region experienced a comparable store sales (CSS) decrease of 12.6% due to the Sino-US trade dispute, impacting domestic retail[34] - Sales to external customers in Hong Kong and Macau were HK$561 million, down from HK$651 million in 2018, a decrease of approximately 13.9%[116] Financial Position - Total assets as of June 30, 2019, increased to HK$5,100 million, compared to HK$4,124 million at the end of 2018[64] - Current liabilities increased to HK$1,486 million, up from HK$992 million at the end of 2018, indicating a rise of 49.8%[64] - Non-current liabilities rose to HK$706 million, compared to HK$123 million at the end of 2018, reflecting a significant increase[64] - As of June 30, 2019, total equity attributable to shareholders of the Company was HK$2,908 million, a decrease from HK$3,000 million at December 31, 2018[65] Accounting and Compliance - The Group adopted HKFRS 16 Leases effective January 1, 2019, resulting in changes to accounting policies and adjustments to unaudited interim results[81] - The Group's principal accounting policies were updated to reflect the changes in lease accounting, affecting both the balance sheet and income statement[89] - The unaudited condensed consolidated interim financial information for the six months ended June 30, 2019, was reviewed by PricewaterhouseCoopers[191] - The Audit Committee has discussed auditing, risk management, and internal control systems regarding the interim results for the six months ended June 30, 2019[192] Corporate Governance - The company has complied with all applicable code provisions under the Corporate Governance Code, with some deviations noted[186] - The company believes that stability and continuity in the role of the Chairman are beneficial for successful business plan implementation[186] - The company has a strong corporate governance structure in place to ensure effective oversight of management[186] Employee and Management Information - The Group had approximately 7,900 employees as of June 30, 2019, down from 8,200 employees on December 31, 2018[55] - The company reported an annual director's fee of HK$420,000 for Dr. Barry John Buttifant, effective from April 1, 2019[187] - Dr. Chan Ka Wai's annual salary is set at HK$2,343,162, effective from April 1, 2019[187] Share Options and Equity - A total of 2,724,000 share options were outstanding as of June 30, 2019, under the 2002 and 2011 Share Option Schemes[181] - The total number of share options granted during the period is 148,940,000[184] - The total number of share options exercised during the period is 1,996,000[184] - The total number of share options lapsed during the period is 210,000[184] - The total number of share options cancelled during the period is 146,734,000[184] Sustainability and Corporate Responsibility - The company emphasizes its commitment to sustainability by printing its interim report on environmentally friendly paper[195]

Financial Performance - Sales for 2018 reached HK$5,509 million, a slight increase from HK$5,412 million in 2017, representing a growth of 1.8%[4] - Gross profit for 2018 was HK$3,250 million, maintaining a gross margin of 59.0%, compared to 59.5% in 2017[4] - Operating profit decreased to HK$625 million, with an operating margin of 11.3%, down from 12.7% in the previous year[4] - EBITDA for 2018 was HK$821 million, resulting in an EBITDA margin of 14.9%, a decline from 16.1% in 2017[4] - Profit attributable to shareholders was HK$480 million, with earnings per share (EPS) of HK$30.5 cents, compared to HK$31.8 cents in 2017[4] - Profit after income taxes attributable to shareholders was HK$480 million, a decrease from HK$500 million in 2017[10] - Total comprehensive income for the year was HK$467 million, significantly lower than HK$680 million in 2017[188] - Profit before income taxes for 2018 was HK$684 million, down from HK$744 million in 2017, a decrease of about 8.1%[193] Liquidity and Financial Health - The company reported a current ratio of 2.5 times, indicating strong liquidity[4] - Total assets amounted to HK$4,124 million, while total liabilities were HK$1,115 million, indicating a healthy balance sheet[4] - Cash and bank balances, net of bank loan, were HK$1,017 million at December 31, 2018[19] - Current assets decreased to HK$2,457 million in 2018 from HK$2,574 million in 2017, a reduction of about 4.5%[189] - Total liabilities decreased to HK$1,115 million in 2018 from HK$1,181 million in 2017, a decrease of about 5.6%[191] - Net current assets decreased to HK$1,465 million in 2018 from HK$1,526 million in 2017, a decline of approximately 4.0%[191] Store Operations and Expansion - The total number of stores worldwide at year-end was 1,578, with 1,103 directly operated stores and 475 operated by franchisees[4] - The total number of stores increased by 12 during the year, reaching 2,426 stores[18] - The Group is actively developing new franchise markets in Africa and India, with results expected to materialize in 2020 and beyond[11] - The company plans to expand its market presence and enhance product offerings in the upcoming fiscal year[6] Market Challenges and Outlook - The retail industry faced significant challenges in 2018 due to the Sino-US trade dispute and unseasonably warm weather[11] - The outlook for 2019 remains unpredictable due to global market volatility[12] - The Group anticipates a challenging retail environment in 2019 due to ongoing Sino-US trade disputes and rising interest rates[71] - Consumer sentiment is expected to remain cautious in 2019, prompting the Group to closely monitor economic developments[71] Corporate Governance - The Company fully complied with the Corporate Governance Code except for deviations from Code Provisions A.2.1 and A.4.2 during the year 2018[78] - The Board comprises four Independent Non-executive Directors, two Non-executive Directors, and three Executive Directors, ensuring a diverse range of expertise and effective guidance[81] - The Company has established compliance procedures to ensure adherence to relevant laws and regulations[116] - The Board is committed to transparency, accountability, and independence to uphold the interests of stakeholders and maximize shareholder value[78] Risk Management - The Group's risk management committee is chaired by Mr. Loynd, emphasizing the importance of compliance and governance[74] - The Risk Management Committee, comprising four members, is responsible for the Group's risk management and internal control systems, reporting to the Board twice a year[103] - The Group maintains proper and accurate accounting records to enhance the reliability of financial reporting and ensure compliance with applicable laws[102] Employee and Talent Development - The Group continues to recruit young talent as part of its ongoing succession plan[12] - The Group will continue to invest heavily in training for sales, customer service, management, planning, and leadership development[72] - The Fast-Track Management Scheme, restructured in 2014, has graduates now in important executive positions across multiple disciplines[72] Shareholder Returns - The dividend payout ratio for 2018 was 109.8%, reflecting a commitment to returning value to shareholders[4] - The Board declared a total dividend of HK33.5 cents per share for 2018[10] - Proposed dividends for 2018 were HK$260 million, down from HK$314 million in 2017, a reduction of about 17.2%[189] Strategic Initiatives - The company aims to expand its market presence through strategic initiatives and partnerships[74] - The Group plans to improve quality and efficiency while exploring new business opportunities to facilitate growth[71] - E-business and franchising are identified as key strategic channels for future growth in Mainland China[40]