FAIRWOOD HOLD(00052)2024-06-28 04:01Revenue Growth - Revenue from external customers in Hong Kong increased to HKD 2,951,897 thousand in 2024 from HKD 2,873,125 thousand in 2023, representing a growth of approximately 2.7%[30] - Revenue for the year increased by 3.7% to HKD 3.1369 billion (2023: HKD 3.0242 billion)[64] - Total revenue for the year ended March 31, 2024, was HKD 3,136,947,000, compared to HKD 3,024,152,000 in the previous year, representing a growth of approximately 3.7%[75] - Revenue from Hong Kong (registered location) for the year ended March 31, 2024, was HKD 2,953,910,000, compared to HKD 2,873,282,000 in the previous year, while revenue from Mainland China was HKD 183,037,000, up from HKD 150,870,000[75] - Revenue increased by 3.7% year-on-year to HKD 3.1369 billion (2023: HKD 3.0242 billion)[108] Profitability - The company's pre-tax profit from reporting segments rose to HKD 98,779 thousand in 2024 from HKD 97,137 thousand in 2023, indicating a modest increase[28] - Net profit for the year rose by 12.9% to HKD 50.7 million (2023: HKD 44.9 million)[64] - The company recorded a profit before tax of HKD 65,125,000 for the year ended March 31, 2024, up from HKD 51,664,000 in the previous year, an increase of approximately 26%[83] - Profit attributable to equity shareholders rose by 12.9% to HKD 50.7 million (2023: HKD 44.9 million)[108] - Gross profit increased to HKD 270.6 million (2023: HKD 256.8 million)[61] - Operating profit rose to HKD 98.5 million (2023: HKD 83.4 million)[61] - Gross profit margin improved to 8.6% (2023: 8.5%)[108] Earnings Per Share - The company's basic earnings per share increased to HKD 50,657 thousand in 2024 from HKD 44,880 thousand in 2023, based on 129,553,000 weighted average shares[17] - Basic earnings per share increased by 12.9% to 39.10 HK cents (2023: 34.64 HK cents)[64] Financial Position - The company's net asset value stood at HKD 660,405 thousand in 2024, down from HKD 680,629 thousand in 2023[7] - The company maintained a strong financial position with cash and cash equivalents of HKD 641.0 million as of March 31, 2024 (2023: HKD 646.8 million)[64] - The company had no bank loans and a debt ratio of zero as of March 31, 2024[64] - Total current assets as of March 31, 2024, were HKD 796,398,000, compared to HKD 792,447,000 in the previous year, while total current liabilities were HKD 858,343,000, up from HKD 817,224,000, resulting in a net current liability of HKD 61,945,000[76] - The company's bank deposits and cash equivalents as of March 31, 2024, stood at HKD 640,983,000, slightly down from HKD 646,758,000 in the previous year[83] - The company's total equity as of March 31, 2024, was HKD 660,405,000, down from HKD 680,629,000 in the previous year[70] - The company's total non-current assets as of March 31, 2024, were HKD 1,389,407,000, compared to HKD 1,436,544,000 in the previous year[69] - The company's total liabilities as of March 31, 2024, were HKD 858,343,000, up from HKD 817,224,000 in the previous year[76] - The company's total assets minus current liabilities as of March 31, 2024, were HKD 1,389,468,000, compared to HKD 1,485,321,000 in the previous year[69] - The company's total assets stood at HKD 2.2478 billion as of March 31, 2024, with a net current liability of HKD 61.9 million[150] - The company has no bank loans and a capital gearing ratio of zero, with unused bank credit facilities of HKD 231.3 million[137] Dividends - The company proposed a final dividend of 30.0 HK cents per share, bringing the total annual dividend to 41.0 HK cents per share with a payout ratio of approximately 105%[64] - The company declared and paid an interim dividend of 11.0 HK cents per share, totaling HKD 14,251 thousand, and proposed a final dividend of 30.0 HK cents per share, totaling HKD 38,866 thousand[101] Operational Performance - Same-store sales growth for Fairwood fast food restaurants increased by approximately 2% year-over-year[22] - Same-store sales growth in mainland China restaurants increased by approximately 16% year-on-year[131] - The company opened 11 new stores, with 7 in Hong Kong and 4 in mainland China, while closing 8 underperforming stores, resulting in a total of 182 stores by March 31, 2024[135] - The company introduced new products such as Thai-style series, Japanese-style beef rice, and laksa lunch sets to attract a broader customer base[40] - The company improved packaging costs for takeaway products and strategically adjusted menu prices based on seasonality[41] - The company introduced new menu items targeting younger coffee shop enthusiasts and high-end customers[132] - Effective food cost control measures helped reduce overall food costs despite rising raw material prices[133] Digitalization and Innovation - The company implemented digitalization measures, including kitchen management systems and mobile ordering and payment options in restaurants[23] - The "Fairwood APP" mobile application has over 730,000 members, up from 660,000 six months prior[111] - The company plans to optimize staff allocation, expand digital measures, and redesign work processes to address rising labor costs[141] Sustainability Initiatives - The company's solar panels have generated over 36,000 kWh of electricity since August 2023[114] - The company reduced the use of over 1 million single-use plastic utensils and donated over 35,000 meal boxes through its sustainability initiatives[145] Employee and Labor Costs - Employee costs increased to approximately HKD 1.1004 billion (2023: HKD 1.0205 billion)[121] - The company's long-service payment liability was HKD 28,850 thousand, with HKD 608 thousand classified as current liabilities[106] Tax and Depreciation - The company's deferred tax assets and liabilities were recognized for deductible and taxable temporary differences related to right-of-use assets and lease liabilities[5] - The company's current tax provision for Hong Kong profits tax was HKD 11,104 thousand, with deferred tax arising from temporary differences of HKD 3,408 thousand[100] - Depreciation expenses increased by HKD 17.2 million, from HKD 389.5 million to HKD 406.7 million, due to new store openings and lease modifications[95] - The company's depreciation expense for property, plant, and equipment increased by HKD 4.6 million to HKD 93.7 million due to increased store renovations[147] Interest and Financial Expenses - Interest income surged to HKD 28,113 thousand in 2024, nearly doubling from HKD 14,757 thousand in 2023[13] - The company's interest income was HKD 28,086 thousand, while interest expenses were HKD 30,748 thousand, resulting in a net interest expense of HKD 2,662 thousand[92] Government Subsidies - Government subsidies decreased significantly to HKD 1,416 thousand in 2024 from HKD 17,619 thousand in 2023, reflecting a reduction of approximately 92%[13] Capital Expenditure and Commitments - Capital expenditure (excluding right-of-use assets) increased to HKD 131.5 million in 2024, up from HKD 104.7 million in 2023, due to increased store renovations[148] - The company's outstanding capital commitments stood at HKD 24.3 million as of March 31, 2024 (2023: HKD 10.3 million)[118] Membership and Customer Engagement - The "Happy Elderly Card" membership exceeded 470,000, with an increase of over 30,000 members in the past six months[135] Cash Flow - The company's net cash generated from operating activities for the year ended March 31, 2024, was HKD 650,108,000, down from HKD 709,393,000 in the previous year[83] Return on Equity - The average return on equity increased to 7.6% in 2024 from 6.4% in 2023[143] Accounts Receivable and Payable - The company's accounts receivable within 1-30 days amounted to HKD 20,130 thousand, with total accounts receivable of HKD 20,460 thousand[104] - The company's provision for restoration costs of leased premises was HKD 73,237 thousand, with HKD 26,601 thousand classified as current liabilities[106] Shareholder Information - The company will suspend share transfer registration from September 4, 2024, to September 10, 2024, inclusive, for the annual general meeting[162] - No purchase, sale, or redemption of any listed securities by the company or its subsidiaries during the year ended March 31, 2024[163] - The full-year results announcement is available on the company's website (www.fairwoodholdings.com.hk) and the HKEX website (www.hkexnews.hk)[166] - The 2023/2024 annual report, containing all information required by the listing rules, will be sent to shareholders and published on the same websites in due course[166]