Financial Performance - Revenue for 2024 was HKD 1,486,479,000, a slight decrease of 0.0% compared to HKD 1,487,090,000 in 2023[7] - Core operating profit decreased by 43.2% to HKD 41,444,000 from HKD 72,973,000 year-on-year[7] - Net profit attributable to shareholders fell by 58.6% to HKD 23,914,000, down from HKD 57,709,000 in the previous year[7] - The gross profit margin decreased by 0.5 percentage points to 52.9% due to a higher proportion of B2B sales, which have a lower margin[42] - Operating expenses as a percentage of revenue increased from 49.1% to 50.6%, primarily due to declining sales in Hong Kong eyewear stores[42] - Basic earnings per share decreased by 58.1% from 7.4 HK cents to 3.1 HK cents[44] Dividends - The board declared a final dividend of HKD 0.01 per share, with a total annual dividend of HKD 0.03 per share, resulting in a payout ratio of 97%[7] - The board proposed a final dividend of HKD 0.01 per share, amounting to HKD 7,774,000, with a policy to distribute at least 50% of the group's net profit as general dividends[170] - The company declared an interim dividend of HKD 0.02 per share, totaling HKD 15,548,000, to be paid on September 12, 2024[169] Store Operations - The number of retail stores decreased from 176 in 2023 to 157 in 2024, with significant closures in Guangzhou[8] - The group opened 3 new Saint Anna bakeries in Hong Kong and Macau while closing 12, resulting in a total of 125 locations, a decrease of 9 compared to the previous year[23] - The group reduced its store count in Guangzhou to 4, confirming a one-time loss due to business restructuring amid a tough operating environment[27] Sales and Market Performance - The company experienced a 14.1% decline in sales for baked goods and a 13.6% decline in eyewear due to structural changes in consumer behavior[13] - The "B2B" wholesale business showed strong performance, offsetting declines in retail, with double-digit growth recorded[15] - Zoff maintained its market share in Hong Kong despite challenges, with stable performance from the newly acquired Zoff Singapore business[16] - Total revenue from the bakery business saw a low single-digit decline compared to 2023, primarily due to reduced weekend foot traffic in Hong Kong and Macau[23] New Initiatives and Product Development - The new "Merci Moncher" store concept is set to open in December 2024 in Causeway Bay, aimed at diversifying revenue sources[4] - The group successfully launched new high-margin daily baked goods, increasing market share in categories like sourdough bread and frozen sandwiches[24] - The group introduced several low-sugar products to cater to health-conscious consumers, becoming the first operator in Hong Kong and Macau to launch Clean Label family-sized bread[24] - Despite a challenging retail environment, the group achieved double-digit growth in festive revenue and profit margins through successful new product launches and pricing strategies[24] Financial Position and Cash Management - The company maintained a strong financial position with net cash of HKD 207,000,000 and no bank borrowings[7] - As of December 31, 2024, the group's net cash balance was HKD 207 million, generated primarily from operations, with no bank borrowings[44] - The group has a backup bank financing amount of HKD 88 million to assist in capital planning and management[44] Corporate Governance - The board emphasizes good corporate governance principles to enhance shareholder value, focusing on transparency, accountability, and independence[67] - The current board composition includes three female members, representing 33% of the board, aligning with the company's diversity policy[82] - The board conducts annual performance evaluations to ensure effective operation, with results indicating satisfactory performance of the board and its committees[84] - The company is committed to maintaining a gender ratio of at least 20% on the board, with ongoing assessments of board diversity[79] Risk Management and Compliance - The company has established a risk management framework that integrates risk identification, assessment, reporting, and mitigation measures into its strategic planning and daily operations[126] - The board of directors is responsible for overseeing the effectiveness of the risk management and internal control systems, with assistance from the audit committee[122] - The company maintains a zero-tolerance policy towards bribery and is committed to complying with all applicable anti-bribery laws[130] Shareholder Communication - The company has implemented a shareholder communication policy to enhance transparency and interaction with shareholders[143] - The company emphasizes the importance of shareholder communication and transparency during the annual general meeting[144] Share Options and Equity - The share options plan allows for a maximum of 10% of the issued shares to be granted, with 55,145,897 shares available under the plan, representing approximately 7.09% of the issued shares[183] - The company reported a total of 10,166,000 share options granted to continuous contract employees, with an exercise price of HKD 0.764[190] - The company has a total of 371,292,000 shares held by director Dr. Feng Guo Lun, representing approximately 47.76% of total equity[198]

Financial Performance - Revenue for the year ended December 31, 2024, decreased by 0.0% to HKD 1,486,479,000 compared to HKD 1,487,090,000 in 2023[3] - Core operating profit fell by 43.2% to HKD 41,444,000, including a 47.8% decline to HKD 34,275,000 when accounting for lease liabilities[3] - Net profit attributable to shareholders decreased by 58.6%, amounting to HKD 23,914,000, down from HKD 57,709,000 in the previous year[3] - The group reported total revenue of HKD 1,486,479,000 for the year ended December 31, 2024, a slight decrease of 0.04% compared to HKD 1,487,090,000 in 2023[52] - Core operating profit decreased significantly to HKD 41,444,000, down 43% from HKD 72,973,000 in the previous year[52] - The net profit attributable to shareholders was HKD 23,914,000, a decline of 58.6% from HKD 57,709,000 in 2023[54] - The company’s total comprehensive income for the year 2024 was HKD 21,425,000, down from HKD 57,760,000 in 2023, a decrease of 62.96%[57] - The company reported a profit attributable to shareholders of HKD 23,914,000 for the year 2024, compared to HKD 57,709,000 in 2023, a significant drop of 58.6%[57] Retail and Store Operations - The total number of retail stores decreased from 176 in 2023 to 157 in 2024, with significant reductions in the number of stores in Hong Kong and Guangzhou[6] - The group opened three new Saint Anna bakery locations in Hong Kong and Macau while closing 12, resulting in a total of 125 locations, a decrease of nine from the previous year[18] - The group aims to optimize its store network and has closed a poorly performing store while opening a new one in a high-traffic area[35] Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.01 per share, with a total annual dividend of HKD 0.03 per share, resulting in a payout ratio of 97%[7] - The proposed final dividend for the year ending December 31, 2024, is HKD 0.01 per share, totaling an annual dividend of HKD 0.03 per share, down from HKD 0.06 per share in 2023[102] - The company maintains a policy to distribute no less than 50% of the group's net profit as general dividends to shareholders[102] Business Segments and Performance - The wholesale business for baked goods showed strong performance, offsetting declines in retail sales due to changing consumer patterns[7] - The bakery business experienced a decline in same-store sales due to a weak consumer atmosphere, high interest rates, and changing consumption patterns, with total revenue showing a low single-digit decrease compared to 2023[17] - The "business-to-business" segment recorded a significant double-digit sales increase, helping to offset the lower retail sales in the bakery business[21] - Eyewear sales revenue increased to HKD 149,200,000 in 2024 from HKD 142,379,000 in 2023, reflecting a growth of 4.83%[66] Financial Position and Assets - The company reported a net cash position of HKD 207,000,000 with no bank borrowings, maintaining a strong financial status[7] - The group has a cash balance of HKD 207,000,000 as of December 31, 2024, with no bank borrowings[39] - The group’s total assets decreased to HKD 1,213,604,000 in 2024 from HKD 1,286,088,000 in 2023, a reduction of 5.6%[56] - The company’s total equity fell to HKD 635,422,000 in 2024, down from HKD 660,190,000 in 2023, representing a decrease of 3.7%[56] Operational Efficiency and Investments - The group invested in equipment upgrades and new production locations to enhance capacity and efficiency, aiming to improve product quality and seize new business opportunities[22] - The group streamlined workflows and enhanced food production management to improve operational efficiency amid a tough market[21] - The group aims to enhance operational efficiency through the adoption of new equipment and the latest technology[45] Market Trends and Consumer Behavior - The company anticipates that government measures to stimulate local consumption will improve consumer confidence and purchasing power in the second half of 2024[13] - The company aims to enhance its core competencies and adapt to new consumer trends while expanding its market presence in both Hong Kong and Singapore[13] - The group introduced new high-margin daily baked goods, increasing market share in categories like sourdough bread and frozen sandwiches, while also launching low-sugar products to cater to health-conscious consumers[19] Governance and Compliance - The company maintained a strong governance structure, with independent non-executive directors leading key committees to ensure accountability and transparency[91] - The board of directors is responsible for the risk management and internal control systems, which are reviewed annually for effectiveness and adequacy[98] - The audit committee confirmed that the risk management and internal control systems are established, sufficient, and effective, providing reasonable assurance for asset protection and risk monitoring[99] Employee and Labor Costs - The company had a total of 2,733 employees as of December 31, 2024, with 56% based in Hong Kong and 44% in Guangzhou, Macau, Shenzhen, and Singapore[44] - Employee benefits expenditure increased to HKD 523,000,000 in 2024 from HKD 492,000,000 in 2023, reflecting a growth of 6.3%[44] Taxation and Financial Reporting - The estimated tax provision for the year was calculated at a rate of 16.5% on the estimated taxable profit for both 2024 and 2023[80] - The effective tax rate for 2024 was 22.9%, compared to 18.9% in 2023, reflecting changes in tax liabilities across different regions[81] - The company has adopted revised Hong Kong Financial Reporting Standards effective from January 1, 2024, with no significant impact on the financial statements[63]

Financial Performance - Revenue for the six months ended June 30, 2024, increased by 2.8% to HKD 721,654,000 compared to HKD 701,832,000 in 2023[18] - Core operating profit decreased by 19.5% to HKD 17,419,000 from HKD 21,632,000 in the previous year[18] - The company reported a net profit attributable to shareholders of HKD 12,767,000, down 16.0% from HKD 15,199,000 in 2023[18] - The retail sales value in Hong Kong decreased by 6.6% and the quantity by 8.2% during the review period[22] - The eyewear segment, particularly the Zoff brand, faced significant sales declines, with a value drop of 14.6% and a quantity drop of 16.7%[22] - Despite challenges, the group maintained stable revenue compared to the previous year, primarily due to the growth in the "business-to-business" segment and the performance of new high-margin products[26] - The group recorded a 16.7% decrease in Guangzhou bakery business revenue due to the closure of underperforming stores[34] - The company reported a total comprehensive income of HKD 12,666,000 for the period, compared to HKD 15,315,000 in the same period last year, reflecting a decrease of 17.1%[65] - The company’s net profit attributable to shareholders for the six months was HKD 12,767,000, compared to HKD 15,199,000 in the previous year, a decrease of approximately 16.0%[62] - Basic earnings per share for the period were HKD 1.6, down from HKD 2.0 in the same period last year, reflecting a decline of 20%[62] Store Operations and Network - The number of stores decreased from 176 to 175, with a notable reduction in the number of Saint Anna Bakery locations in Hong Kong from 120 to 116[20] - The group operates 130 Saint Anna bakeries in Hong Kong and Macau as of June 30, 2024, compared to 128 at the end of the first half of 2023, with one new store opened and eight closed during the first six months[26] - The group plans to continue cautious expansion of its store network while exploring new locations and store formats[33] - The group is facing pressure on store operating profits due to rising rental and labor costs, leading to a review of store performance and the closure of underperforming locations[28] Business Segments and Growth - The "B2B" bakery business experienced strong growth, driven by increased demand for quality OEM products[19] - The "business-to-business" segment recorded significant double-digit growth during the review period, driven by the rapid development of this business and the introduction of high-margin new products[26] - The group continues to invest resources in production capacity in mainland China to drive sustainable growth in the bakery and "business-to-business" segments, which have become important revenue sources[24] - The group launched a new product line in the first half of the year, which received positive consumer feedback[31] Financial Position and Cash Flow - The company maintains a solid financial position with net cash of HKD 176,000,000 and no bank borrowings[19] - The group has a cash balance of HKD 176 million as of June 30, 2024, with no bank borrowings[34] - The net cash generated from operating activities was HKD 91,399,000, up from HKD 55,372,000 in the previous year, representing a growth of 65.1%[66] - Total assets as of June 30, 2024, were HKD 1,226,834,000, down from HKD 1,286,088,000 at the end of 2023, a decrease of about 4.6%[64] Employee and Management - As of June 30, 2024, the group employed a total of 3,150 employees, with 1,554 (49%) based in Hong Kong and 1,596 (51%) in Guangzhou, Macau, Shenzhen, and Singapore[35] - Total employee costs for the six months ended June 30, 2024, amounted to HKD 257 million, compared to HKD 239 million for the same period last year, reflecting an increase of approximately 7.5%[35] - Total remuneration for key management personnel increased to HKD 9,710,000 for the six months ended June 30, 2024, compared to HKD 7,524,000 in the same period of 2023, reflecting a growth of approximately 29%[95] - The group reported a significant increase in bonuses for key management personnel, rising to HKD 3,335,000 in 2024 from HKD 1,480,000 in 2023, representing a growth of over 125%[95] Corporate Governance and Compliance - The board has fully complied with the corporate governance code as per the Hong Kong Stock Exchange's listing rules during the six months ended June 30, 2024[37] - The board consists of one non-executive chairman, four non-executive directors, three independent non-executive directors, and one executive director, ensuring a diverse range of skills and perspectives[39] - The Audit Committee is responsible for reviewing the group's financial reporting, risk management, and internal controls, and has the authority to investigate any activities within its scope[42] - The company has established a shareholder communication policy to enhance transparency and facilitate effective communication with shareholders[48] Market Outlook and Challenges - The retail environment is expected to remain challenging in the second half of the year, prompting the company to optimize its store network and enhance product competitiveness[19] - The group anticipates that the second half of the year will be similar to the first half, adjusting expectations based on local economic conditions and consumer sentiment[24] - The group remains optimistic about the long-term growth potential of the market, particularly with ongoing infrastructure development and economic integration in various regions[24]

Financial and Operational Summary [Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) In H1 2024, the Group's revenue saw a slight increase of 2.8% to HKD 722 million, but core operating profit and profit attributable to company shareholders decreased by 19.5% and 16.0% year-on-year, respectively, while the interim dividend per share remained unchanged at HKD 2.0 cents Financial Highlights | Indicator | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue (HKD Thousands) | 721,654 | 701,832 | +2.8% | | Core Operating Profit (HKD Thousands) | 17,419 | 21,632 | -19.5% | | Profit Attributable to Company Shareholders (HKD Thousands) | 12,767 | 15,199 | -16.0% | | Basic Earnings Per Share (HK Cents) | 1.6 | 2.0 | -20.0% | | Interim Dividend Per Share (HK Cents) | 2.0 | 2.0 | N/A | [Operational Summary](index=2&type=section&id=%E7%87%9F%E9%81%8B%E6%91%98%E8%A6%81) The Group achieved sales growth in a challenging market, primarily driven by seasonal products and B2B bakery business, but net profit declined due to weak performance in Hong Kong's eyewear business and upfront investments in the Singapore market, while maintaining a robust financial position with HKD 176 million in net cash and no bank borrowings, despite a slight decrease in total store count from 176 to 175 - Sales growth was primarily driven by strong performance in seasonal products and the **Business-to-Business (B2B) bakery segment**[2](index=2&type=chunk) - Net profit decline was mainly attributed to the weak performance of the Hong Kong eyewear business and upfront investments in the Singapore region[2](index=2&type=chunk) - The Group maintained a robust financial position with **HKD 176 million in net cash** and **no bank borrowings**[2](index=2&type=chunk) Store Count by Type | Store Type | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Bakery Business Stores** | **154** | **161** | | Saint Honore Cake Shop | 148 | 155 | | Mon cher Cake Shop | 6 | 6 | | **Total Zoff Eyewear Stores** | **21** | **15** | | **Total Convenience Retail Asia Stores** | **175** | **176** | Management Discussion and Analysis [CEO's Report](index=3&type=section&id=%E8%A1%8C%E6%94%BF%E7%B8%BD%E8%A3%81%E5%A0%B1%E5%91%8A) The CEO noted that the retail market continued to face multiple challenges in the first half, including increased outbound travel by Hong Kong residents, changing consumption habits of mainland tourists, high interest rates, and generally subdued consumer sentiment; despite this, the Group achieved reasonable financial performance through product innovation and prudent cost control, with significant growth in the B2B business due to industry outsourcing trends, and expressed satisfaction with the progress of the new eyewear business in Singapore - The retail market faced multiple challenges, including increased outbound travel by Hong Kong residents, changing shopping habits of mainland Chinese tourists, high interest rates, and generally subdued consumer sentiment, leading to reduced store traffic and average purchase volume[3](index=3&type=chunk) - The Group's **Business-to-Business (B2B) segment** achieved significant growth as industry participants increasingly outsourced non-core bakery products[3](index=3&type=chunk) [Business Review](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Business segment performance diverged, with Saint Honore Cake Shop benefiting from strong B2B growth largely offsetting same-store sales decline, Mon cher Cake Shop experiencing weekend sales decline due to outbound travel trends, and Zoff eyewear business facing same-store sales decline in Hong Kong due to low-price competition from mainland, while successfully narrowing losses in the newly acquired Singapore market through effective operations [Saint Honore Cake Shop](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%EF%BC%8D%E8%81%96%E5%AE%89%E5%A8%9C%E9%A4%85%E5%B1%8B) Despite a decline in same-store sales due to weak consumption and increased outbound travel by Hong Kong residents, Saint Honore Cake Shop's overall revenue remained flat year-on-year, primarily driven by strong double-digit growth in its Business-to-Business (B2B) segment, with the Group responding to rising costs and market challenges by streamlining workflows, optimizing its store network, and enhancing online marketing through its O2O platform with over 1.3 million members - The **Business-to-Business (B2B) segment** developed rapidly, achieving **strong double-digit growth** that offset the decline in same-store sales caused by reduced consumer spending and increased outbound travel[4](index=4&type=chunk) - The O2O customer relationship management platform 'Saint Honore Cake Online' has **over 1.3 million members** in Hong Kong and Macau, serving as a crucial marketing tool and receiving awards from the Hong Kong Retail Management Association[5](index=5&type=chunk) - To address labor shortages and rising costs, the Group implemented measures such as streamlining workflows, adjusting operating hours, and increasing flexible staff[4](index=4&type=chunk) - Guangzhou operations continued to be affected by the challenging retail environment, with the Group currently controlling losses through prudent cost management and store network adjustments[5](index=5&type=chunk) [Mon cher](index=5&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%EF%BC%8DMon%20cher) Japanese cake brand Mon cher launched its first Lunar New Year gift boxes in the first half to positive reception; however, weekend sales declined due to outbound travel trends and reduced local consumer appetite for non-essential items like premium cakes, with the Group planning to open a new store in Central in early 2025 - Weekend sales declined due to outbound travel trends and reduced local consumer appetite for premium cakes and similar products[6](index=6&type=chunk) [Zoff](index=5&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%EF%BC%8DZoff) Hong Kong's Zoff business experienced a decline in same-store sales due to significantly lower pricing from Greater Bay Area competitors and a strong Hong Kong dollar encouraging local residents to spend in mainland China; in Singapore, the Group acquired local operations in January and successfully narrowed losses by streamlining operations, adjusting pricing strategies, and enhancing social media promotion, despite facing customer traffic challenges - Same-store sales in Hong Kong decreased due to significantly lower pricing from Greater Bay Area competitors and a strong Hong Kong dollar, which encouraged local residents to spend in mainland China[7](index=7&type=chunk) - The Group entered the Southeast Asian market for the first time in January this year by acquiring Zoff Singapore operations, successfully narrowing losses through measures such as streamlining store operations and adjusting pricing strategies[7](index=7&type=chunk) [Future Outlook](index=6&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group anticipates continued retail market challenges in the second half, focusing on expanding its product portfolio (especially frozen products), vigorously developing the high-potential B2B business, and investing in digitalization and automation of production facilities to counter rising labor costs, while adopting a cautious approach to store network expansion and continuing to seek expansion opportunities through M&A and joint ventures - Strategic priorities include expanding the product portfolio, leveraging the competitive advantages of frozen product categories, and anticipating steady development of the B2B business in the second half[8](index=8&type=chunk) - To support bakery business growth and address labor market challenges, the Group is increasing investments to upgrade production facilities, heavily investing in digitalization, smart, and semi-automated manufacturing[8](index=8&type=chunk) - The Group will continue to seek expansion opportunities through mergers and acquisitions, joint ventures, licensing, and franchising to expand its specialized retail portfolio[8](index=8&type=chunk) [Financial Review](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2024, turnover increased by 2.8% year-on-year to HKD 722 million, primarily driven by B2B growth in the bakery business; gross profit margin rose by 1.6 percentage points to 53.7% due to effective pricing and cost control, but operating expenses as a percentage of turnover increased from 49.7% to 51.7% due to rising labor costs, leading to a 19.5% decrease in core operating profit, while the Group maintained a robust financial position with HKD 176 million in net cash and no bank borrowings Financial Indicators | Financial Indicator | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Turnover (HKD Million) | 722 | 702 | | Gross Profit Margin | 53.7% | 52.1% | | Operating Expenses as % of Turnover | 51.7% | 49.7% | | Core Operating Profit (HKD Million) | 17 | 21.6 | | Net Profit (HKD Million) | 13 | 15 | - Gross profit margin increased by **1.6 percentage points**, benefiting from effective pricing strategies, efficient category management, improved production efficiency, and favorable RMB and JPY exchange rates[9](index=9&type=chunk) - Operating expenses as a percentage of turnover increased, primarily due to rising staff-related costs driven by a tight labor market[9](index=9&type=chunk) [Employees](index=8&type=section&id=%E5%83%B1%E5%93%A1) As of June 30, 2024, the Group had a total of 3,150 employees, with 49% based in Hong Kong; total staff costs for the first half increased to HKD 257 million from HKD 239 million in the same period last year, as the Group is committed to offering competitive compensation and development opportunities to address challenges posed by low unemployment and labor shortages Employee Statistics | Item | Data | | :--- | :--- | | Total Employees (June 30, 2024) | 3,150 | | Proportion of Hong Kong Employees | 49% | | Proportion of Part-time Employees | 23% | | Total Staff Costs (2024 H1) (HKD Million) | 257 | | Total Staff Costs (2023 H1) (HKD Million) | 239 | Condensed Consolidated Financial Statements and Notes [Condensed Consolidated Statement of Profit or Loss](index=9&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2024, the Group recorded revenue of HKD 722 million, a 2.8% year-on-year increase; however, due to increased expenses, core operating profit decreased to HKD 17.42 million, and profit attributable to company shareholders was HKD 12.77 million, a 16.0% decrease from HKD 15.20 million in the same period last year, with basic earnings per share at HKD 1.6 cents Condensed Consolidated Statement of Profit or Loss | Item (HKD Thousands) | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | | :--- | :--- | :--- | | Revenue | 721,654 | 701,832 | | Gross Profit | 387,227 | 365,867 | | Core Operating Profit | 17,419 | 21,632 | | Profit Before Income Tax | 16,747 | 20,280 | | Profit Attributable to Company Shareholders | 12,767 | 15,199 | [Condensed Consolidated Statement of Financial Position](index=11&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2024, the Group's total assets were HKD 1.227 billion, a decrease from HKD 1.286 billion at the end of 2023; total equity was HKD 642 million, total liabilities were HKD 585 million, and cash and cash equivalents decreased from HKD 221 million to HKD 174 million Condensed Consolidated Statement of Financial Position | Item (HKD Thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Assets | 1,226,834 | 1,286,088 | | Total Equity | 641,915 | 660,190 | | Total Liabilities | 584,919 | 625,898 | | Cash and Cash Equivalents | 174,437 | 220,640 | [Notes to Financial Information](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) The notes detail key items such as the basis of financial statement preparation, accounting policies, segment information, taxation, dividends, and receivables/payables; segment data indicates that the bakery business remains the primary revenue source but incurred losses in mainland China, while the eyewear business also recorded overall operating losses due to challenges in the Hong Kong market and initial investments in Singapore [Revenue and Segment Information](index=14&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Total revenue for H1 2024 was HKD 722 million, with bakery sales contributing HKD 649 million and eyewear sales HKD 73 million; by segment performance, Hong Kong and other regions' bakery business contributed the majority of core operating profit (HKD 24.96 million), while mainland China bakery business and eyewear business recorded losses of HKD 3.59 million and HKD 3.95 million, respectively Revenue by Source | Revenue Source (HKD Thousands) | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Bakery Sales Revenue | 648,658 | 629,093 | | Eyewear Sales Revenue | 72,996 | 72,739 | | **Total** | **721,654** | **701,832** | 2024 H1 Core Operating Profit/(Loss) by Segment | Segment (HKD Thousands) | Amount | | :--- | :--- | | Bakery Business (Hong Kong and Other) | 24,964 | | Bakery Business (Mainland China) | (3,594) | | Eyewear Business (Hong Kong and Other) | (3,951) | | **Group Total** | **17,419** | [Dividends](index=20&type=section&id=%E8%82%A1%E6%81%AF) The Board recommended an interim dividend of HKD 2 cents per share for the six months ended June 30, 2024, totaling approximately HKD 15.55 million, consistent with the same period last year - The Board recommended an interim dividend of **HKD 2 cents per share** for the six months ended June 30, 2024 (2023: HKD 2 cents)[30](index=30&type=chunk) Corporate Governance and Other Information [Corporate Governance](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company fully complied with the Corporate Governance Code under the Hong Kong Stock Exchange Listing Rules during the reporting period; the Board has three committees—Audit, Nomination, and Remuneration—all primarily composed of independent non-executive directors, and the Board, with the assistance of the Audit Committee, reviewed the risk management and internal control systems, deeming them adequate and effective during the period - The company fully complied with the code provisions of the Corporate Governance Code for the six months ended June 30, 2024[33](index=33&type=chunk) - The Board and Audit Committee considered the Group's risk management and internal control systems to be adequate and effective during the review period[37](index=37&type=chunk) - The Audit Committee reviewed the unaudited interim financial information for the six months ended June 30, 2024, with senior management[35](index=35&type=chunk) [Dividends and Share-Related Matters](index=23&type=section&id=%E8%82%A1%E6%81%AF%E5%8F%8A%E8%82%A1%E4%BB%BD%E7%9B%B8%E9%97%9C%E4%BA%8B%E5%AE%9C) The Board resolved to declare an interim dividend of HKD 2 cents per share, consistent with the same period last year, and announced the relevant book closure dates for share transfer registration; furthermore, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - The Board resolved to declare an interim dividend of **HKD 2 cents per share** for the six months ended June 30, 2024 (2023: HKD 2 cents)[39](index=39&type=chunk) - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[38](index=38&type=chunk)

Store Network Expansion - Saint Anna Bakery's total number of stores in Hong Kong increased to 120 in 2023 from 115 in 2022, while in Macau, it increased to 14 from 12[1] - Mon cher cake shop in Hong Kong decreased to 6 stores in 2023 from 7 in 2022[1] - Zoff eyewear stores in Hong Kong increased to 15 in 2023 from 14 in 2022[1] - Total number of stores under Lianhua Retail increased to 176 in 2023 from 174 in 2022[1] - The group plans to expand Zoff store network and enhance brand awareness through marketing activities in 2024[37] - The company acquired Zoff Singapore in January 2024, which operates 5 stores in Singapore[115] - The company holds the franchise rights for Zoff in Hong Kong, Macau, and South China, operating 15 stores in Hong Kong[115] Financial Performance - Sales in the bread, pastry, candy, and biscuit categories (including Saint Anna and Mon cher) decreased by 2.9% in 2023[4] - Zoff eyewear sales showed healthy growth compared to 2022[4] - Group revenue increased by 1.7% to HKD 1,487,000,000 in 2023, with bakery business revenue rising by 1.5% to HKD 1,345,000,000[23] - Guangzhou bakery business revenue decreased by 10.7% due to weak economic sentiment in mainland China[23] - Zoff eyewear business revenue increased by 2.7% to HKD 142,000,000, driven by store network expansion[23] - Operating expenses as a percentage of revenue increased from 45.5% to 49.1%, primarily due to rising labor costs[24] - Basic earnings per share decreased by 14.9% from 8.7 HK cents to 7.4 HK cents[25] - Gross profit margin increased by 2.8 percentage points to 53.4%, benefiting from effective pricing strategies and improved production efficiency[39] - Core operating profit before lease liability interest expenses decreased by 12.9% to HKD 73,000,000[40] - Net profit decreased by 14.9% from HKD 68,000,000 to HKD 58,000,000[40] - The group's revenue grew from 647 million HKD in 2019 to 803 million HKD in 2023, with a CAGR of 5.5%[54] - The group's profit increased from 94 million HKD in 2019 to 129 million HKD in 2023, with a CAGR of 6.8%[54] - The company declared a final dividend of 4 HK cents per share[104] Strategic Initiatives and Investments - The company completed the acquisition of Zoff Singapore, expanding its presence into Southeast Asia[6] - The company plans to increase capital expenditure in Hong Kong and Shenzhen production facilities to enhance capacity and introduce new product lines[20] - The company will continue to invest in upgrading the "Saint Anna Cake Online" O2O app to provide more attractive offers to consumers[21] - The company aims to expand its B2B business in the Greater Bay Area, positioning itself as a solution provider for bakery business customers[8] - Group completed the acquisition of Zoff Singapore in January 2024, marking a strategic move into the Southeast Asian market[34] - The group's strategy includes innovation, extensive physical store networks, online shopping experiences, and investment in brand awareness and R&D[67] - The group aims to enhance operational efficiency through new equipment and technology, and synchronize supply chain management[67] - The company is exploring new sustainable business opportunities in Hong Kong, the Greater Bay Area, and Singapore as part of its long-term strategy[83] Corporate Governance and Board Activities - The company's board of directors consists of a non-executive chairman, one executive director, three independent non-executive directors, and four non-executive directors, ensuring diverse skills and perspectives[88] - The company's independent non-executive directors have confirmed their independence, and the company believes they remain independent as of December 31, 2023[91] - The company's board currently includes 3 female members, representing 33% of the board, aligning with its diversity policy[110] - Female employees, including senior management, accounted for 63% of the total workforce as of December 31, 2023[110] - The board aims to maintain a gender ratio of at least 20% female representation[97] - The board held 4 meetings in 2023 with an average attendance rate of 92%[116] - The board conducted an annual performance evaluation using a questionnaire to assess overall performance and effectiveness[113] - The board's nomination committee reviews board composition and considers factors such as skills, regional and industry experience, and background[97] - The average attendance rate for board meetings in 2023 was 92%, with specific committee attendance rates at 88%, 100%, 93%, and 100% respectively[122] - The audit committee held four meetings in 2023 with an average attendance rate of 88%, focusing on financial reporting, risk management, and internal controls[143] - The company's independent auditor, PwC, attended all audit committee meetings and held two independent meetings with committee members to discuss audit-related matters[134] - The audit committee approved fees paid or payable to PwC for the fiscal year ending December 31, 2023, and recommended reappointing PwC as the independent auditor for the fiscal year ending December 31, 2024[146] - The board's performance evaluation in 2023 indicated satisfactory operations of the board and its committees, with all committees fulfilling their duties as outlined in their terms of reference[130] - The company's whistleblowing policy allows employees, shareholders, and stakeholders to report misconduct, including financial reporting and internal control issues, confidentially and anonymously[128] - The board and its committees scheduled meetings in advance to promote high attendance rates, with notices sent at least 14 days before the meeting date[136] - The audit committee reviewed the independence, objectivity, and effectiveness of PwC's audit procedures and expressed satisfaction with their performance[146] - The company's corporate governance practices were strengthened based on recommendations from the board's performance evaluation and feedback from directors[130] - The audit committee includes members with appropriate professional qualifications and expertise in accounting or financial management, as required by the Hong Kong Stock Exchange listing rules[133] - The company's audit services cost HKD 1,354 thousand, while non-audit services (including agreed-upon procedures for interim financial information and tax services) cost HKD 674 thousand, totaling HKD 2,028 thousand[154] - The company has a policy to limit the hiring of current or former employees of the independent auditor for senior executive or financial positions within the group[153] - The company prohibits the independent auditor from providing certain specified non-audit services and requires prior approval from the audit committee for other non-audit services exceeding a certain fee limit[153] - The Remuneration Committee held three meetings in 2023 with a 100% attendance rate to review proposals for granting share options and the remuneration of senior management[159] - The company has adopted a Securities Trading Code to regulate securities transactions by directors and relevant employees, with no violations reported in 2023[168][173] Risk Management and Internal Controls - The company's risk management and internal control system is designed to manage risks and provide reasonable assurance against material misstatements, losses, or fraud[177] - The company's internal control framework aligns with the principles outlined in the Hong Kong Institute of Certified Public Accountants' "Internal Control and Risk Management Basic Framework"[178] - The company's governance structure includes a clear division of responsibilities and an appropriate authorization system, with risk identification, assessment, reporting, and mitigation measures in place[180] - The company's risk management and internal control systems are integrated into strategy formulation, business planning, investment decisions, and daily operations[190] - The company has established and implemented corporate policies and procedures covering major risks and control standards, which are regularly reviewed for effectiveness[186] - The company's financial risk management principles aim to minimize risks, including foreign exchange, credit, liquidity, and interest rate risks[192] - The company's reputation is built on ethical standards, with a Code of Conduct and Business Ethics that includes anti-bribery and anti-corruption guidelines[193] - The company's internal audit team independently reviews the risk management and internal control systems, ensuring they are effective, adequate, and properly followed[195] - The company's independent auditor, PwC, found no significant internal control weaknesses during the fiscal year ending December 31, 2023[196] - The company has procedures in place for handling and disclosing insider information, prohibiting securities trading based on insider knowledge[197] - The company's risk management and internal control systems, including accounting systems, are established, adequate, and effectively operating to provide reasonable assurance[200] - The company regularly reviews contingency and business continuity plans to ensure their effectiveness[191] - The company's governance department conducts annual reviews of risk management and internal control systems, reporting findings to the audit committee[199] Employee and Sustainability Initiatives - The group employed 3,209 employees as of December 31, 2023, with 49% based in Hong Kong and 51% in Guangzhou, Shenzhen, and Macau[69] - Employee benefits expenses for 2023 were 492 million HKD, compared to 446 million HKD in 2022[69] - The group provides competitive compensation plans, performance-based bonuses, and career advancement opportunities for employees[69] - The company has been awarded the "10-Year Plus Caring Company" and "Caring Company" labels by the Hong Kong Council of Social Service for its commitment to community, employees, and the environment[71] - The company focuses on sustainability through the "3R" approach (Reduce, Reuse, Recycle) and uses energy-efficient equipment and low-carbon fuels to reduce carbon emissions[71] - The company's factories in Hong Kong and Shenzhen are ISO 9001 certified, with the Shenzhen factory also holding HACCP food safety certification and CNAS accreditation for its microbiology lab[77] - The company emphasizes workplace satisfaction and employee engagement through initiatives like the "Heart-to-Heart" program, which includes career development, work-life balance, and community activities[76] Corporate Vision and Values - The company's core values include product quality, operational efficiency, customer experience, and a strong "Heart-to-Heart" culture, aiming to provide world-class products and services[82] - The company is committed to high standards of corporate governance, transparency, accountability, and independence to enhance shareholder value[80] - The company's vision is to become a leading premium retailer in Hong Kong, focusing on bakery and eyewear businesses, with expansion plans in the Greater Bay Area and Southeast Asia[82] - The group focuses on customer-centricity, innovation, efficient production, and maintaining a strong partnership with quality suppliers[67] - The board and management actively participate in developing new business models to ensure competitiveness and sustainable growth[67]

Financial Performance - The total revenue for the group reached HKD 1,487,090,000, an increase from HKD 1,462,864,000 in the previous year, representing a growth of approximately 1.66%[46] - Core operating profit decreased to HKD 72,973,000 from HKD 83,758,000, reflecting a decline of about 12.5%[46] - Basic earnings per share fell by 14.9% to HKD 7.4 from HKD 8.7[40] - The group recorded a net profit attributable to shareholders of HKD 57,709,000 in 2023, a decrease from HKD 67,785,000 in 2022[84] - Other income decreased to HKD 8,529,000 from HKD 9,877,000, a decline of approximately 13.6%[46] - Total expenses for sales, store operations, distribution, and administrative costs increased to HKD 1,422,646,000 in 2023 from HKD 1,388,983,000 in 2022[79] - The income tax expense for the year 2023 was HKD 13,417,000, an increase from HKD 11,255,000 in 2022, representing a rise of approximately 19.3%[194] Store Expansion and Operations - The group opened 10 new Saint Anna stores in Hong Kong and Macau, ending the year with a total of 134 stores, an increase of 7 stores from 2022[10] - The group operates a total of 155 stores under the Saint Anna brand across Hong Kong, Macau, and Guangzhou as of December 31, 2023[41] - The number of Mon cher cake shop locations increased to 6, while Zoff eyewear stores rose to 15, reflecting a focus on retail expansion[116][130] - The company aims to expand the Zoff store network and enhance brand awareness through marketing activities to maintain its leading position in the fast-fashion eyewear retail sector in Hong Kong[168] Financial Position and Cash Flow - The group maintained a strong financial position with net cash of HKD 222 million and no bank borrowings, positioning itself favorably for business development or acquisitions[1] - Total liabilities for the group amounted to HKD 613,623,000[34] - Total liabilities on the consolidated balance sheet were HKD 625,898,000 in 2023, down from HKD 668,023,000 in 2022[60] - The net cash balance as of December 31, 2023, was HKD 222,000,000, with no bank borrowings, indicating strong operational cash generation[172] - The company has a backup bank financing capacity of HKD 148,000,000 to assist in capital planning and management[172] Marketing and Customer Engagement - The online-to-offline customer relationship management program "Saint Anna Cake Online" now serves over 1.3 million members in Hong Kong and Macau, enhancing marketing and sales efforts[5] - The group’s marketing initiatives and new product launches contributed to sales growth in festive products[67] - The group has partnered with WeChat and PayMe to enhance marketing efforts and leverage government consumption voucher schemes[141] Dividends and Shareholder Returns - The board declared a final dividend of HKD 0.04 per share[18] - The group proposed a final dividend of HKD 0.04 per share, totaling HKD 31,097,000, compared to HKD 0.05 per share in 2022[69] - Basic earnings per share for 2023 were HKD 0.074, down from HKD 0.087 in 2022, based on a weighted average of 777,001,040 shares[84] Strategic Initiatives and Acquisitions - The group achieved a successful acquisition, expanding its geographical presence from the Greater Bay Area to Southeast Asia[3] - The company completed the acquisition of Zoff Singapore, aiming to strengthen its position in the Southeast Asian market[122] - The company completed the acquisition of Zoff Singapore in January 2024, which operates five stores in key areas, marking a significant milestone in its expansion strategy into Southeast Asia[167] Economic Outlook and Market Conditions - The group maintains a cautiously optimistic outlook for its core business in the medium to long term, despite concerns about local and global economic conditions affecting consumer confidence and spending recovery[86] - The company adopts a cautious approach for 2024, prioritizing growth while strategically allocating resources to higher-return areas[131] - The group anticipates that shopping behavior will normalize, and inflation and interest rates will decline, positively impacting the retail sector in Hong Kong and the Greater Bay Area[86] Operational Efficiency and Cost Management - Operating expenses as a percentage of revenue increased from 45.5% to 49.1%, primarily due to rising employee-related costs in a tight labor market[17] - Employee benefits expenses increased to HKD 492,000,000 in 2023 from HKD 446,000,000 in 2022, with total employees numbering 3,209[149] - The gross profit margin improved due to effective category management, streamlined production processes, and favorable foreign exchange rates[1] - The gross profit margin increased by 2.8 percentage points to 53.4%, attributed to effective pricing strategies and improved production efficiency[170] Customer Behavior and Sales Trends - The number of Hong Kong residents traveling abroad increased, while the growth of mainland Chinese tourists visiting Hong Kong was slower than expected, impacting local consumption[1] - Sales in the bakery segment, including Saint Anna and Mon cher, decreased by 2.9% due to changing consumer behavior post-pandemic[118] - Revenue from bakery products increased due to the resumption of business operations, offsetting declines in cake sales[67] - The "business-to-business" bakery sales recorded double-digit growth, expanding the customer base despite a 10.7% decline in Guangzhou bakery revenue due to weak economic conditions[134] Compliance and Governance - The company has adopted a securities trading code for directors and relevant employees, ensuring compliance with regulations without any reported violations in 2023[96] - The board confirmed compliance with all provisions of the Corporate Governance Code for the year ending December 31, 2023[100] - The company has adopted revised Hong Kong Financial Reporting Standards effective from January 1, 2023, to ensure compliance with operational requirements[160] Asset Management - Total segment assets amounted to HKD 1,234,320,000, with non-current assets additions of HKD 235,661,000[59] - Total assets decreased to HKD 1,286,088,000 in 2023 from HKD 1,323,846,000 in 2022[154] - Non-current assets in Hong Kong totaled HKD 821,436,000, an increase from HKD 780,017,000 in 2022[78]

Financial Performance - Revenue from external customers in Hong Kong for the six months ended June 30, 2023, was HKD 598,999,000, an increase of 5.5% compared to HKD 565,083,000 in the same period of 2022[1] - The company's revenue for the six months ended June 30, 2023, was HKD 701,832,000, an increase of 4% compared to HKD 674,211,000 in the same period of 2022[133] - Gross profit for the same period was HKD 365,867,000, up from HKD 327,342,000, reflecting a positive trend in profitability[133] - Core operating profit decreased slightly to HKD 21,632,000 from HKD 22,417,000 year-on-year[133] - The group reported stable sales for bakery products, while demand for celebratory products remains sluggish[60] - The group’s earnings per share for the period were HKD 2.0, down from HKD 2.2 in the previous year[132] - For the six months ended June 30, 2023, the company's profit attributable to shareholders was HKD 15,199,000, a decrease from HKD 16,690,000 in the same period of 2022, representing a decline of approximately 8.93%[120] - The total comprehensive income attributable to shareholders for the same period was HKD 15,315,000, compared to HKD 16,368,000 in 2022, indicating a decrease of about 6.43%[120] Assets and Liabilities - Total liabilities as of June 30, 2023, decreased to HKD 603,034,000 from HKD 668,023,000 as of December 31, 2022, representing a reduction of approximately 9.7%[1] - As of June 30, 2023, the total assets reported were HKD 1,236,194,000, down from HKD 1,323,846,000 as of December 31, 2022, reflecting a reduction of approximately 6.59%[109] - Non-current assets in Hong Kong increased to HKD 818,869,000 as of June 30, 2023, from HKD 780,017,000 as of December 31, 2022, reflecting a growth of approximately 5.0%[2] - Non-current assets in other regions decreased to HKD 98,093,000 as of June 30, 2023, from HKD 139,880,000 as of December 31, 2022, indicating a decline of approximately 29.8%[2] - The total equity as of June 30, 2023, was HKD 633,160,000, a decrease from HKD 644,348,000 as of January 1, 2023[124] - Total segment assets amounted to HKD 1,057,027,000, with total liabilities at HKD 491,747,000[163] Cash Flow and Financial Position - As of June 30, 2023, the group maintained a strong financial position with net cash of HKD 178 million and no bank borrowings[40] - The net cash generated from operating activities was HKD 55,372,000, significantly higher than HKD 25,939,000 in the previous year[125] - The company reported a cash and cash equivalents balance of HKD 177,069,000, down from HKD 256,125,000, a decrease of 30.9%[doc id='136'] - The company had bank deposits of HKD 55,855,000 as of June 30, 2023, a decrease from HKD 82,501,000 at the end of 2022, representing a decline of approximately 32.36%[109] Employee and Operational Costs - Employee benefit expenses rose to HKD 239,137,000 for the six months ended June 30, 2023, compared to HKD 205,299,000 in the previous year, marking an increase of approximately 16.5%[4] - Total employee costs for the first half of 2023 amounted to HKD 239 million, up from HKD 205 million in the same period last year[52] - The group employed a total of 3,212 staff, with 50% based in Hong Kong and 50% in Guangzhou, Shenzhen, and Macau[52] Market Outlook and Strategy - The company maintains a cautious outlook for the remainder of 2023, reflecting the slower-than-expected economic recovery in Hong Kong post-pandemic[28] - The group anticipates that consumer demand will remain weak in the second half of the year due to ongoing economic challenges[50] - The group is focusing on enhancing its "online-to-offline" digital marketing strategy to meet customer expectations and strengthen its market position in Hong Kong and the Greater Bay Area[32] - The group plans to expand the Zoff brand into other Asian cities, leveraging its success in Hong Kong[48] - The company continues to focus on expanding its bakery and eyewear businesses in Hong Kong and mainland China, leveraging brand recognition and market demand[144] Corporate Governance and Risk Management - The board has established three committees: Audit Committee, Nomination Committee, and Remuneration Committee, each with clear terms of reference[70] - The group’s risk management and internal control systems are deemed adequate and effective, ensuring the protection of significant assets and the management of business risks[75] - The group emphasizes corporate social responsibility and sustainability, practicing the "Three Rs" (Reduce, Reuse, Recycle) and adopting low-carbon fuels[67] Dividends and Share Options - The proposed interim dividend per share remains at HKD 0.02, with total proposed dividends amounting to HKD 15,545,000, slightly up from HKD 15,525,000 in 2022[15] - The company declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2023, consistent with the dividend declared in 2022[119] - The number of share options granted under the 2020 share option scheme was 11,166,000, with 1,000,000 options exercised during the period[116] - The company did not grant any new share options to directors, senior management, or major shareholders during the reporting period[108]

Corporate Governance - The board of directors held five meetings in 2022 with an average attendance rate of 93%[3] - The audit committee and remuneration committee are chaired by independent non-executive directors to ensure independent perspectives[8] - The board is responsible for monitoring and implementing effective risk management and internal control systems[1] - The board has reviewed corporate governance practices and confirmed compliance with the Corporate Governance Code during the year ended December 31, 2022[48] - The company has implemented the Corporate Governance Code within its governance framework, delegating responsibilities to the audit committee[70] - Independent non-executive directors confirmed their independence in accordance with the listing rules, and the company considers them independent as of December 31, 2022[76] - The board is responsible for selecting, appointing, and reappointing directors, with the nomination committee tasked with reviewing board composition[69] - The chairman and CEO positions are held by separate individuals to enhance independence and accountability[83] - The company has established a shareholder communication policy to ensure shareholders receive relevant information to exercise their rights[74] - The board consists of two female members, representing 22% of the total board members, aligning with the company's diversity policy[63] - The company aims to maintain a gender diversity ratio of at least 20% on the board and is committed to gradually increasing the proportion of female members[78] - The board has adopted a revised diversity policy, considering various factors such as skills, industry experience, and gender in its composition[78] Financial Performance - Revenue increased by 7% to HKD 1,462,864,000 compared to HKD 1,361,840,000 in the previous year[99] - Core operating profit decreased by 4% to HKD 83,758,000 from HKD 87,663,000 year-on-year[99] - The company reported a 9% decline in profit attributable to shareholders from continuing operations, totaling HKD 67,785,000 compared to HKD 74,399,000 in the previous year[99] - The company maintains a strong financial position with net cash of HKD 257,000,000 and no bank borrowings[100] - The company aims for double-digit stable growth in revenue and profit over the next three years, focusing on expanding its store network in Hong Kong and the Greater Bay Area[100] - The company declared a final dividend of HKD 0.05 per share[107] - The dividend payout ratio was reported at 169.1%, indicating a strong return to shareholders[194] - Basic earnings per share from continuing operations decreased by 9.4% to HKD 0.087[176] - In 2022, the company achieved earnings per share (EPS) of 450 HKD cents, representing a year-on-year increase of 600%[194] - The total equity return was reported at 542.5% for the year, indicating strong financial performance[194] Risk Management and Compliance - The company has established a risk management and internal control framework with three levels of oversight[23] - The audit committee conducted an annual review of the effectiveness of the group's risk management and internal control systems, confirming they are established, sufficient, and effective[46] - The company has implemented measures to manage financial risks, including foreign exchange, credit, liquidity, and interest rate risks[40] - The company has adopted a policy to handle and disclose inside information, ensuring confidentiality until timely disclosure is made[45] - The company maintains a zero-tolerance approach towards bribery and emphasizes ethical standards across all operational areas[41] - The internal audit function is overseen by the governance department, ensuring compliance with established policies and procedures[42] - There were no significant breaches of the Code of Conduct and Business Ethics reported in 2022 that could impact the company's operations[26] Operational Performance - The total number of stores increased to 174, up from 153, with 19 new stores opened in Hong Kong and Macau during the year[100][106] - The company achieved high single-digit sales growth due to store network expansion, despite a slight decline in comparable same-store sales[127] - The company has opened three new Mon cher stores in Japan, enhancing its presence in the premium cake market[130] - The "corporate-to-corporate" business segment has shown satisfactory growth, supplying products to two major retail chains[127] - The company has implemented measures to ensure a safe working environment amid the COVID-19 pandemic, including employee training and regular disinfection of facilities[190] - The company is focused on sustainable business practices and corporate social responsibility, aligning its values with its operational culture[199] - The company plans to explore new sustainable long-term business opportunities in the Greater Bay Area[200] Strategic Initiatives - The company has implemented a three-year business plan and annual budget, with quarterly reviews of operational and financial performance[25] - The company plans to continue expanding its store network and enhance its digital marketing efforts on platforms like Douyin and WeChat to boost sales[122] - The group is actively seeking surrounding business and acquisition opportunities to increase revenue sources and expand its footprint[115] - The company is actively exploring acquisition targets to enhance brand value and achieve synergies[147] - The company has implemented energy-saving measures, including installing LED lights and energy-efficient glass, as part of its commitment to corporate responsibility[1] - The company plans to enhance its "online-to-offline" customer relationship management platform to improve digital experience[173] Employee and Community Engagement - The company has been recognized with the "10-year Plus Caring Company" logo by the Hong Kong Council of Social Service, reflecting its commitment to community and employee care[191] - Female employees, including senior management, accounted for 63% of the total workforce as of December 31, 2022, reflecting the nature of the retail and bakery industry[64] - The company is focused on maintaining a strong employer brand and supporting employee development amid rising operational costs[115] - The company provides regular training for directors to ensure compliance with new regulations and to promote ongoing professional development[35]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其準確性或完整 性亦不發表任何聲明，並明確表示概不就因本公佈全部或任何部分內容而產生或因倚賴該等內容而引 致之任何損失承擔任何責任。 CONVENIENCE RETAIL ASIA LIMITED 利亞零售有限公司 （於開曼群島註冊成立之有限公司） （股份代號：00831） 業績公佈 截至二零二二年十二月三十一日止年度 財務摘要 二零二二年 二零二一年 變動 千港元 千港元 • 收益 +7% 1,462,864 1,361,840 • 核心經營溢利 -4% 83,758 87,663 • 核心經營溢利 (包括租賃負債利息開支) -6% 76,843 81,627 • 公司股東應佔溢利 ...

Revenue and Profit Performance - Revenue for the first half of 2022 increased by 11.1% to HKD 674,211,000 compared to HKD 606,945,000 in 2021[33] - Core operating profit rose by 10.7% to HKD 22,417,000 from HKD 20,251,000 year-on-year[33] - The company reported a decrease of 27.2% in profit from discontinued operations, down to HKD 16,690,000 from HKD 22,912,000[33] - The company experienced a 1.5% decline in profit from continuing operations, which was HKD 16,690,000 compared to HKD 16,941,000 in the previous year[33] - Gross profit for the same period was HKD 327,342 thousand, up from HKD 301,616 thousand, indicating an increase of 8.5%[108] - The net profit attributable to shareholders decreased to HKD 16,690 thousand from HKD 22,912 thousand, a decline of 27.2%[114] - Basic earnings per share for continuing operations remained stable at 2.2 HKD cents, while total earnings per share dropped from 3.0 HKD cents to 2.2 HKD cents[108] Cash Position and Dividends - The company maintained a net cash position of HKD 181,000,000 with no bank borrowings[34] - The company declared an interim dividend of HKD 0.02 per share, consistent with the previous year[34] - Cash and cash equivalents decreased to HKD 180,382 thousand from HKD 290,285 thousand, a decline of 37.9%[123] - The proposed interim dividend per share remains at HKD 0.02, consistent with the previous year, amounting to HKD 15,525,000[164] Store Network and Expansion - The number of stores under the group increased to 164 as of June 30, 2022, compared to 153 on December 31, 2021[41] - The group operates 119 Saint Anna stores in Hong Kong and Macau as of June 30, 2022, up from 95 stores at the end of the first half of 2021[52] - The company remains cautiously optimistic about the second half of the year, focusing on expanding its store network in Hong Kong and the Greater Bay Area[34] - The group plans to explore development opportunities in the Greater Bay Area through network expansion and potential franchising arrangements[48] - The company plans to continue expanding the store network for Saint Anna, Zoff, and Mon cher in Hong Kong and Macau, exploring franchising opportunities in the Greater Bay Area[63] Operational Challenges and Cost Management - Despite challenges from the COVID-19 pandemic, the company achieved double-digit revenue growth due to store network expansion and successful sales promotions[34] - The company faced significant risks from the pandemic, inflation, and supply chain disruptions, prompting measures to control costs and streamline operations[34] - The group has implemented cost control measures and is reviewing retail pricing to maintain competitiveness amid rising operational costs[48] - Gross profit margin decreased by 1.1 percentage points to 48.6% due to rising food and production costs, prompting the company to implement productivity enhancements and price adjustments[65] Marketing and Customer Engagement - The group has successfully recruited over 100,000 members for the "Saint Anna Cake Online" app, enhancing customer experience and driving foot traffic to physical stores[55] - The group has launched innovative marketing campaigns that contributed to sales growth for the Saint Anna and Zoff brands in the latter half of the review period[51] - The company successfully utilized the government's consumption voucher scheme, with approximately 70% of Zoff's sales during the promotional period attributed to new customer acquisition[59] - The group has partnered with major online food ordering platforms in Guangzhou, increasing brand exposure to nearly 10,000 people weekly[56] Corporate Governance and Shareholder Information - The company has adhered to the corporate governance principles, ensuring transparency, accountability, and independence during the six months ending June 30, 2022[73] - The audit committee is responsible for reviewing the group's financial reporting, risk management, and internal controls, ensuring compliance with the relevant regulations[77] - The board of directors is composed of one non-executive chairman, four non-executive directors, three independent non-executive directors, and one executive director, promoting independence and accountability[74] - The company has established a risk management and internal control system that is deemed adequate and effective, providing reasonable assurance regarding the safeguarding of assets and reliability of financial reporting[83] - The company has a dedicated investor relations policy to enhance communication transparency with investors and the public[84] Shareholder Structure and Equity - As of June 30, 2022, the total number of shares held by Dr. Feng Guo Lun is 340,292,000, representing approximately 43.84% of the total equity[86] - HSBC Trustee (C.I.) Limited holds 311,792,000 shares, accounting for about 40.17% of the equity[90] - Standard Life Aberdeen plc holds 93,020,000 shares, which is approximately 11.98% of the equity[90] - FIL Limited and its affiliates each hold 71,204,000 shares, representing about 9.17% of the equity[90] - The company’s major shareholders include Dr. Feng Guo Lun and his family, who collectively control 50% of King Lun Holdings Limited[88] Employee Costs and Compensation - Employee costs for the first half of 2022 totaled HKD 205 million, down from HKD 234 million in the same period last year[69] - Total management compensation increased to HKD 9,511,000 in the first half of 2022, up from HKD 8,340,000 in 2021, reflecting a 14% increase[183] - The total remuneration for bonuses rose significantly to HKD 3,263,000 in 2022 from HKD 2,484,000 in 2021, marking a 31% increase[183] - Employee stock option benefits were recorded at HKD 168,000 in 2022, a new addition compared to zero in 2021[183] - The retirement cost under the defined contribution plan decreased slightly to HKD 27,000 in 2022 from HKD 36,000 in 2021[183]