TEXWINCA HOLD(00321)2023-06-16 10:17Assets and Liabilities - Total non-current assets decreased to HKD 2,345,914 thousand in 2023 from HKD 2,596,785 thousand in 2022[3] - Total current assets decreased to HKD 4,600,708 thousand in 2023 from HKD 6,380,963 thousand in 2022[3] - Inventory decreased to HKD 1,519,889 thousand in 2023 from HKD 2,484,148 thousand in 2022[3] - Cash and cash equivalents decreased to HKD 1,927,436 thousand in 2023 from HKD 2,363,988 thousand in 2022[3] - Total current liabilities decreased to HKD 1,527,093 thousand in 2023 from HKD 3,032,615 thousand in 2022[3] - Net current assets decreased to HKD 3,073,615 thousand in 2023 from HKD 3,348,348 thousand in 2022[3] - Total non-current liabilities decreased to HKD 403,966 thousand in 2023 from HKD 509,614 thousand in 2022[4] - Net assets decreased to HKD 5,015,563 thousand in 2023 from HKD 5,435,519 thousand in 2022[4] - Property, plant, and equipment increased to HKD 1,204,066 thousand in 2023 from HKD 1,139,878 thousand in 2022[3] - Investment properties increased to HKD 543,405 thousand in 2023 from HKD 532,077 thousand in 2022[3] - Total assets decreased to HKD 6,946,622 thousand in FY2023 from HKD 8,977,748 thousand in FY2022[56] - Total liabilities reduced to HKD 1,931,059 thousand in FY2023 from HKD 3,542,229 thousand in FY2022[56] - Total assets minus current liabilities decreased to HKD 5,419,529 thousand in 2023 from HKD 5,945,133 thousand in 2022[133] - Reserves decreased to HKD 4,818,556 thousand in 2023 from HKD 5,230,119 thousand in 2022[134] - The company's equity attributable to ordinary shareholders decreased to HKD 4,818,556 thousand in 2023 from HKD 5,230,119 thousand in 2022[134] Revenue and Profit - Total revenue for 2023 decreased to HKD 6,058,755K from HKD 8,043,172K in 2022, representing a decline of approximately 24.7%[13] - Retail and distribution segment revenue for 2023 was HKD 1,760,944K, down from HKD 2,495,864K in 2022, a decrease of 29.4%[13] - Net profit for 2023 was HKD 63,101K, a significant drop from HKD 186,709K in 2022, reflecting a 66.2% decrease[13] - Revenue from external customers in Mainland China for 2023 was HKD 2,525,380K, down from HKD 3,829,672K in 2022, a decline of 34.1%[15] - Revenue from the US market decreased to HKD 1,733,597K in 2023 from HKD 2,694,177K in 2022, a decline of 35.6%[15] - Total revenue decreased by 24.7% to HKD 6,059 million in FY2023 compared to HKD 8,043 million in FY2022[72] - Net profit attributable to ordinary equity holders dropped by 60.7% to HKD 75 million in FY2023 from HKD 191 million in FY2022[72] - Revenue decreased to HKD 6,058,755 thousand in 2023 from HKD 8,043,172 thousand in 2022, a decline of 24.7%[130] - Gross profit dropped to HKD 1,571,965 thousand in 2023 from HKD 2,328,950 thousand in 2022, a decrease of 32.5%[130] - Net profit for the year fell to HKD 63,101 thousand in 2023 from HKD 186,709 thousand in 2022, a decrease of 66.2%[130] - Total comprehensive income for the year was a loss of HKD 143,616 thousand in 2023 compared to a profit of HKD 281,805 thousand in 2022[132] Business Segments - Retail and distribution business sales amounted to HKD 1,761 million, accounting for 29.1% of the group's total revenue, down from 31.0% in 2022[75] - Gross margin for the retail and distribution business was 44.9%, slightly decreased from 45.3% in 2022[75] - The company closed 267 self-operated stores in mainland China, representing 26.9% of the total self-operated stores in the market[75] - Hong Kong retail business revenue and gross margin increased by 14.0% and 4.7% respectively compared to the previous year[75] - Total sales in mainland China decreased by 43% to HKD 1,105 million, while Hong Kong sales increased by 14% to HKD 629 million[77] - Textile business sales decreased to HKD 4,297 million in FY2023 from HKD 5,544 million in FY2022, with gross margin dropping to 18.1% from 21.3%[74] - Sales revenue decreased by 22.5% to HKD 4,297 million in the textile business (2022: HKD 5,544 million), accounting for 70.9% of the company's total revenue (2022: 68.9%)[123] Expenses and Margins - Gross margin declined slightly by 3.1 percentage points to 25.9% in FY2023 from 29.0% in FY2022[72] - Gross profit margin for 2023 was 44.9%, slightly down from 45.3% in 2022[109] - Sales and distribution expenses decreased to HKD 971,391 thousand in 2023 from HKD 1,254,294 thousand in 2022[130] - Administrative expenses decreased to HKD 753,747 thousand in 2023 from HKD 808,651 thousand in 2022[130] - Operating loss for 2023 was HKD 267 million, an improvement from HKD 289 million in 2022[109] - EBITDA for 2023 was HKD -126 million, compared to HKD -26 million in 2022[109] Financial Ratios and Performance Metrics - Interest coverage ratio, accounts receivable turnover days, and inventory turnover days were 3x, 48 days, and 92 days respectively, compared to 7x, 51 days, and 113 days in 2022[80] - Total assets return ratio was -12.8% in 2023, down from -10.4% in 2022[109] - Sales return ratio was -15.4% in 2023, compared to -10.9% in 2022[109] - Equity return ratio was -226.0% in 2023, significantly lower than -73.4% in 2022[109] - Comparable store sales growth ratio was -17.7% in 2023, compared to -4.8% in 2022[109] Capital Expenditure and Investments - Capital expenditure for the textile business was HKD 246 million in FY2023, slightly down from HKD 251 million in FY2022[74] - Capital expenditure for the year was HKD 264 million, with HKD 246 million allocated to the textile and apparel business and HKD 18 million to retail and distribution[95] - Capital expenditure decreased to HKD 18 million in 2023 from HKD 49 million in 2022[109] - The company plans to establish a new production base in Southeast Asia to enhance business flexibility and cost efficiency, with Vietnam being a potential location[98] Other Income and Expenses - The company received HKD 107,128K in compensation for inventory losses due to a fire incident[13] - Interest income increased to HKD 41,534K in 2023 from HKD 28,839K in 2022, a growth of 44.0%[13] - Other income and gains increased to HKD 201,967 thousand in 2023 from HKD 154,085 thousand in 2022[130] - Inventory loss due to fire in a third-party warehouse in Mainland China amounted to HKD 162,278,000, with partial compensation received from the insurance company. A total of HKD 107,128,000 was recognized as a reversal in the consolidated income statement[33] Dividends and Shareholder Equity - The company proposed a final dividend of HKD 0.10 per ordinary share (2022: HKD 0.10), bringing the total dividend for the year to HKD 0.20 per ordinary share, an increase of 11.1% compared to the previous year[43] - Basic earnings per share were calculated based on the profit attributable to ordinary equity holders and the weighted average number of ordinary shares issued, which remained unchanged at 1,381,696,104 shares[35] Market and Regional Performance - Non-current assets in Mainland China decreased to HKD 1,477,385K in 2023 from HKD 1,660,509K in 2022, a reduction of 11.0%[15] - Net sales in Indonesia increased significantly to HKD 27 million in 2023, up 238% from HKD 8 million in 2022, with retail floor area expanding to 23,636 square feet and the number of stores doubling to 8[49] - The company had approximately 9,654 employees (2022: 12,427) across Greater China and Indonesia, with employee compensation determined based on industry conditions and individual performance[54] Accounts Receivable and Payable - Accounts receivable, net of loss provisions, amounted to HKD 26,707,000 (2022: HKD 29,346,000), with credit terms ranging from "cash before delivery" to "90 days from invoice date"[36] - Accounts payable at the end of the reporting period were non-interest bearing and generally had a 90-day credit term[37] - Receivables within 90 days decreased to HKD 417,019 thousand in FY2023 from HKD 831,462 thousand in FY2022[65] - Receivables over 90 days increased to HKD 145,353 thousand in FY2023 from HKD 75,089 thousand in FY2022[65] Depreciation and Amortization - Depreciation of property, plant, and equipment was HKD 222,829 thousand in FY2023, slightly down from HKD 225,798 thousand in FY2022[61] Tax and Financial Strategy - The company's effective tax rate remained at 16.5% for 2023, consistent with the previous year[18] - The company has adopted forward foreign exchange contracts to mitigate currency risks, with major assets, liabilities, revenues, and expenses denominated in HKD, USD, CNY, and JPY[97] Cash and Credit Facilities - Cash and cash equivalents, equity attributable to owners, and unused bank credit facilities stood at HKD 1,927 million, HKD 5,026 million, and HKD 6,036 million respectively at the end of the year[80] Economic Outlook and Risks - The company expects a slow global economic recovery in 2023 due to high inflation and interest rates, but anticipates improved consumer confidence as COVID-19 restrictions ease[85]