Financial Performance - Revenue for the six months ended September 30, 2019, was HK$541,184,000, a decrease of 16.0% from HK$644,260,000 in 2018[18] - Gross profit dropped to HK$37,592,000, representing a 50.0% decline compared to HK$75,127,000 in the previous year[18] - Gross profit margin decreased to 6.9%, down 4.8 percentage points from 11.7% in 2018[18] - The company reported a loss attributable to equity holders of HK$32,382,000, compared to a profit of HK$38,296,000 in the same period last year[18] - Basic loss per share was HK(4.70), compared to earnings of HK$5.52 per share in 2018[18] - The company incurred a loss before tax of HK$48,976,000, compared to a profit of HK$25,469,000 in the same period last year[23] - The company reported a loss for the period of HK$33,475,000, compared to a profit of HK$37,576,000 in the same period last year, representing a significant decline[35] - Total comprehensive income for the period was HK$872,000, down from HK$17,012,000 year-over-year[36] - The total comprehensive income for the period was HK$872,000, significantly lower than the previous year's comprehensive income of HK$17,732,000[49] - The profit attributable to equity holders of the Company for the period was a loss of HK$32,382,000, compared to a profit of HK$38,296,000 in the previous year[137] Dividends and Shareholder Returns - Total dividends per share for the period were HK$2.0, a reduction of 50.0% from HK$4.0 in the previous year[18] - The company declared special dividends of HK$13,754,000 during the period[46] - The special dividend declared was HK$2.0 cents per ordinary share, a decrease from HK$12.8 cents in the previous year[147] Assets and Liabilities - Cash and cash equivalents amounted to approximately HK$529 million[19] - Non-current assets totaled HK$580,955,000, slightly up from HK$580,234,000[38] - Current assets decreased to HK$893,160,000 from HK$920,389,000, primarily due to a reduction in inventories[38] - Total current liabilities decreased to HK$330,763,000 from HK$338,814,000, indicating improved short-term financial health[38] - The company’s net assets as of September 30, 2019, were HK$1,119,001,000, down from HK$1,136,653,000[41] - Total equity as of September 30, 2019, was HK$1,119,001,000, a decrease from HK$1,136,653,000 as of April 1, 2019[46] - The company's retained profits stood at HK$803,891,000 as of September 30, 2019, down from HK$848,896,000 at the beginning of the period[46] - The total liabilities of the Group as of September 30, 2019, were HK$355,114,000, a decrease from HK$363,970,000 as of March 31, 2019[115] Cash Flow and Financing Activities - Net cash flows used in operating activities amounted to HK$ (31,594,000), a significant improvement compared to HK$ (147,732,000) in the same period last year, reflecting a reduction of approximately 78.6%[55] - Cash and cash equivalents at the end of the period were HK$ 74,421,000, down from HK$ 97,215,000 in the previous year, representing a decrease of about 23.4%[58] - Net cash flows from investing activities were HK$ (3,496,000), a decrease from HK$ 127,779,000 in the prior year, indicating a shift in investment strategy[55] - The financing activities resulted in a net cash outflow of HK$ (5,120,000), compared to a cash inflow of HK$ 474,000 in the same period last year[55] - The company reported a significant decrease in cash flows from financing activities, indicating a potential shift in capital management strategy[55] Segment Performance - The Group has two reportable operating segments: manufacturing and sale of footwear products, and property investment[100] - For the six months ended September 30, 2019, the total revenue from external customers was HK$541,184,000, a decrease of 16% compared to HK$644,260,000 in the same period of 2018[109] - The segment results for the manufacturing and sale of footwear products showed a loss of HK$42,887,000 for the six months ended September 30, 2019, compared to a profit of HK$4,893,000 in 2018[113] - The Group reported a loss before tax of HK$48,976,000 for the six months ended September 30, 2019, compared to a profit before tax of HK$25,469,000 in the same period of 2018[113] Market and Sales Environment - The overall sales environment in the footwear market remained weak, impacting the Group's orders for the six months ended September 30, 2019[193] - The decline in turnover was attributed to a 5.5% decrease in average selling price (ASP) and an 11.9% decrease in business volume (pairs)[189] - Footwear product revenue decreased by 16.0% to approximately HKD 541 million, down from HKD 644 million in the previous year, attributed to a 5.5% decline in average selling price and an 11.9% drop in volume[195] Cost Management and Production - Material costs as a proportion of turnover increased due to the use of more leather for premium products, despite a drop in overall sales[192][197] - The Group incurred additional costs related to the relocation of production lines to adjust to customer sourcing plan changes during the period[200] - The production lines were frequently reorganized to accommodate new products, affecting worker efficiency due to the need for re-adaptation[196] - The lack of repeat orders necessitated frequent changes in production lines, impacting overall manufacturing efficiency[196] - The Group's overall sales volume was affected by conservative procurement plans from brand customers, leading to smaller batch sizes and shorter delivery times[193] Compliance and Accounting Standards - The interim financial information has been prepared in accordance with the applicable disclosure requirements of the Listing Rules and HKAS 34, ensuring compliance with regulatory standards[61] - The Group adopted HKFRS 16 using a retrospective approach, with the first application date being April 1, 2019, and cumulative effects recognized as adjustments to retained earnings[71] - The transition to HKFRS 16 did not have a significant financial impact on the Group's interim financial statements[71]

Financial Performance - Revenue from continuing operations decreased by 5.5% to HK$1,100,649,000 in 2019 from HK$1,164,873,000 in 2018[12] - Gross profit margin declined to 10.6% in 2019, down from 15.7% in 2018, representing a decrease of 5.1 percentage points[12] - Profit attributable to equity holders of the Company fell by 51.1% to HK$39,466,000 in 2019 compared to HK$80,714,000 in 2018[12] - Basic earnings per share decreased by 86.0% to 5.14 HK cents in 2019 from 36.82 HK cents in 2018[12] - Total dividends per share for the year were reduced by 80.0% to 6.0 HK cents from 30.0 HK cents in the previous year[12] - For the year ended March 31, 2019, turnover decreased by 5.5% year-on-year to approximately HK$1,101 million, with a 10.9% drop in business volume (pairs)[89] - Net profit attributable to equity holders decreased by approximately 86.2% year-on-year to approximately HK$36 million, down from HK$257 million[99] - The Group maintained a strong liquidity position with net cash of approximately HK$610 million as of March 31, 2019, down from HK$804 million the previous year[108] - Shareholders' equity decreased to approximately HK$1,118 million as of March 31, 2019, from approximately HK$1,221 million in 2018[173] Market Conditions - The management anticipates a challenging market environment ahead, impacting revenue growth prospects[12] - The footwear industry experienced generally weak retail sales in major markets, with notable bankruptcies among US footwear businesses due to competition and supply-chain interruptions[31] - Southeast Asia's growth rate declined last year, with ongoing pressure expected on Asia's economy, particularly with China's growth anticipated to slow further[28] - The subdued retail conditions in major footwear markets have continued in 2019, with conservative procurement patterns observed among brand customers[68] - The Group faced challenges from a conservative procurement approach by brand customers amid a weak retail environment[90] Strategic Initiatives - The Company plans to focus on new product development and market expansion strategies to improve future performance[12] - The Company is exploring potential mergers and acquisitions to enhance its market position and operational capabilities[12] - The Group has established two main scalable production hubs in Vietnam and Cambodia, supported by a center in Mainland China, to adapt to the trend of footwear brand customers shifting sourcing locations[35][36] - The Group is focusing on higher-value products and brands with growth potential to balance business volume and profitability[33] - Investment in technology and innovation is prioritized to provide effective solutions to customers[33] - The Group aims to improve long-term Return on Investment (ROI) while maintaining a healthy financial position[33] - The Group is enhancing automation and lean manufacturing processes to seek further efficiency improvements[45][47] - The Group is focusing on higher levels of automation, innovation, and digitalization to drive efficiency and quality enhancements, including the use of artificial intelligence[52][53] Production and Capacity - A new factory has been constructed adjacent to existing facilities in southern Vietnam, with plans to ramp up production as utilization increases[38] - The utilization rate of the Group's production capacity was 68.9%, a decrease from 70.0% in the previous year, primarily due to reduced business volume[123] - The Southeast Asian production base contributed 85.2% of total footwear production, an increase from 82.2% in the previous year, while Mainland China's share decreased to 14.8%[124] - The Group's production lines were 89.5% based in Vietnam and Cambodia, with only 10.5% retained in Mainland China[122] - Southern Vietnam contributed 68.8% of total volume output, an increase from 62.1% in 2018, with plans to add 3 production lines in the coming year[131] - The Cambodian factory contributed 16.4% of output, down from 20.1% in 2018, with plans to expand to 12 production lines[139] Cost Management - Stringent cost control measures are being enforced in light of weak market conditions[33] - The operational strategy included frequent assembly line rearrangements to meet client demands for smaller order sizes, impacting economies of scale[85] - The Group maintained strict cost control while investing in refining manufacturing processes and technology[56][58] - Recurring profit decreased due to a reduction in revenue from the core footwear manufacturing business, additional labor costs from converting traditional production lines, and costs associated with reevaluating the business model[105] Employee and Training - The company employed approximately 9,100 employees as of March 31, 2019, across its subsidiaries in Hong Kong, Taiwan, the PRC, Vietnam, and Cambodia[184] - Localization efforts are underway in Vietnam and Cambodia to strengthen long-term development by training local staff for management roles[62] - The affiliate is expected to reduce operating losses in the coming year due to improved worker skills and efficiency, as well as economies of scale[153] Dividends and Shareholder Actions - The Board recommended a final dividend of HK Nil cents and a special dividend of HK2.0 cents, compared to HK2.2 cents and HK12.8 cents in the previous year, resulting in a payout ratio of 116.7%[113] - The Group repurchased and canceled 5,046,000 ordinary shares at an aggregate consideration of approximately HK$8.4 million during the year[174] - A premium of approximately HK$7,909,000 was paid on the repurchase of shares, which has been debited to the share premium account[180] ESG and Sustainability - The ESG Report outlines the Group's performance in environmental protection, human resources, operating practices, and community involvement for the financial year from April 1, 2018, to March 31, 2019[191] - The ESG Report emphasizes the importance of proper disclosure of business activities to build trust with investors and shareholders[197] - The Group's operational strategy aims to continually improve its environmental and social aspects to meet global sustainability standards[188] - The Group conducted a thorough review and evaluation of its existing policies and practices during the preparation of the ESG Report[189]