凌锐控股(00784) - 2024 - 年度业绩

Financial Highlights Ling Holdings Limited significantly improved its financial performance for the year ended March 31, 2024, turning a loss into profit despite a decrease in revenue, with gross profit and basic earnings per share both moving from negative to positive Summary of Key Financial Data for FY2024 | Metric | 2024 (HK$ Million) | 2023 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 194.0 | 239.0 | -18.8% | | Gross profit (loss) | 28.6 | (6.6) | Turned to profit | | Gross profit (loss) margin | 14.8% | -2.8% | Significant improvement | | Profit (loss) attributable to owners of the Company | 0.7 | (30.0) | Turned to profit | | Basic earnings (loss) per share | 0.08 HK cents | (3.75) HK cents | Turned to profit | - The Board does not recommend the payment of any final dividend for the year ended March 31, 2024[4] Consolidated Financial Statements This section presents Ling Holdings Limited's consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position for the year ended March 31, 2024, detailing key financial data including revenue, costs, profit, assets, liabilities, and shareholders' equity Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2024, the company saw a decrease in revenue but, through effective cost control, turned gross loss into profit, ultimately achieving an annual profit and positive basic earnings per share Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Metric | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 194,043 | 238,957 | | Direct costs | (165,406) | (245,548) | | Gross profit (loss) | 28,637 | (6,591) | | Other income | 1,429 | 2,940 | | Administrative expenses | (27,651) | (27,387) | | Finance costs | (1,758) | (1,684) | | Profit (loss) before tax | 655 | (32,722) | | Income tax credit | – | 2,683 | | Profit (loss) and total comprehensive income (expense) for the year | 655 | (30,039) | | Basic earnings (loss) per share (HK cents) | 0.08 | (3.75) | Consolidated Statement of Financial Position As of March 31, 2024, non-current assets remained stable, while current assets and liabilities decreased, leading to a slight increase in net current assets and total equity, indicating a stable financial position Consolidated Statement of Financial Position (Summary) | Metric | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 44,248 | 43,978 | | Current assets | 96,673 | 135,187 | | Liabilities | | | | Current liabilities | 58,734 | 98,888 | | Non-current liabilities | 4,739 | 3,484 | | Equity | | | | Net assets | 77,448 | 76,793 | | Total equity | 77,448 | 76,793 | - Bank balances increased from HK$12,636 thousand in 2023 to HK$29,853 thousand in 2024, indicating improved liquidity[7] - Trade receivables decreased from HK$38,949 thousand in 2023 to HK$19,954 thousand in 2024, and contract assets decreased from HK$78,803 thousand to HK$43,315 thousand, reflecting improved accounts receivable management or reduced business volume[7] Notes to the Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements, covering general company information, application of accounting standards, revenue recognition, other income components, taxation, earnings per share calculation, receivables and payables, contract assets and liabilities, and contingent liabilities 1. General Information Ling Rui Holdings Limited is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engaged in foundation engineering services in Hong Kong, with financial statements presented in HKD - The Group is principally engaged in the provision of foundation engineering services in Hong Kong[9] - The consolidated financial statements are presented in Hong Kong dollars, which is also the functional currency of the Group[10] 2. Application of New and Revised Hong Kong Financial Reporting Standards Several new and revised HKFRSs were first applied this year, with no significant impact on the Group's current and prior period financial position or performance, and no material impact is expected from future applications - The application of new and revised Hong Kong Financial Reporting Standards in the current year had no significant impact on the Group's financial position and performance and/or disclosures in these consolidated financial statements for the current and prior periods[11] - The Directors of the Company do not anticipate that the application of all other new Hong Kong Financial Reporting Standards that have been issued but are not yet effective will have a material impact on the consolidated financial statements in the foreseeable future[14] 3. Revenue and Segment Information The Group's revenue is entirely derived from foundation engineering services provided in Hong Kong, recognized over time using the input method, operating as a single business segment - Revenue represents the net amounts received and receivable by the Group for foundation engineering services provided to customers, recognized over time using the input method based on the progress and outcome of foundation engineering service contracts[15] Revenue Recognition Time and Classification | Revenue Classification | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Recognized over time: Foundation engineering services | 194,043 | 238,957 | - The Group's revenue is solely derived from foundation engineering services in Hong Kong, thus operating as a single operating segment[17] 4. Other Income Other income primarily includes government grants, interest income, sales of scrap materials, and compensation received, with a significant decrease this year mainly due to the absence of government grants received in the prior period Other Income Components | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Government grants | – | 2,233 | | Interest income - bank deposits | 10 | 47 | | Interest income from life insurance policies | 133 | 131 | | Sales of scrap materials | 91 | 93 | | Machine rental income | – | 70 | | Compensation received | 1,139 | – | | Miscellaneous income | – | 279 | | Other | 56 | 87 | | Total | 1,429 | 2,940 | - The decrease in other income was mainly due to the absence of government grants of approximately HK$2.2 million received under the Employment Support Scheme for the year ended March 31, 2023[19] 5. Profit (Loss) Before Tax Profit before tax this year was primarily influenced by factors such as depreciation, directors' and staff costs, with total staff costs showing a decrease compared to the previous year Factors Affecting Profit (Loss) Before Tax | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Auditor's remuneration | 900 | 900 | | Depreciation of property and equipment | 12,269 | 9,826 | | Directors' remuneration | 4,418 | 3,909 | | Other staff costs (salaries and benefits) | 35,377 | 48,686 | | Retirement benefit scheme contributions | 1,013 | 1,465 | | Total staff costs | 40,808 | 54,060 | 6. Income Tax Credit There was no income tax credit this year, compared to a tax credit last year, with Hong Kong implementing a two-tiered profits tax system for eligible entities Income Tax Credit | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong profits tax: Current tax | – | 96 | | Hong Kong profits tax: Deferred tax | – | (2,779) | | Total | – | (2,683) | - Under the two-tiered profits tax regime in Hong Kong, eligible group entities are taxed at 8.25% on the first HK$2 million of assessable profits and 16.5% on profits above HK$2 million[22] 7. Dividends No dividends were paid or declared for the years ended March 31, 2024, and 2023, nor have any been proposed since the end of the reporting period - No dividends were paid or declared for the years ended March 31, 2024, and 2023, and no dividends have been proposed since the end of the reporting period[23] 8. Earnings (Loss) Per Share Basic earnings per share improved significantly to 0.08 HK cents this year, compared to a basic loss per share of 3.75 HK cents last year, with no diluted earnings per share presented due to the absence of potential ordinary shares Earnings (Loss) Per Share Calculation | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Profit (loss) for the year (HK$ Thousand) | 655 | (30,039) | | Weighted average number of ordinary shares (thousands) | 800,000 | 800,000 | | Basic earnings (loss) per share (HK cents) | 0.08 | (3.75) | - Diluted earnings (loss) per share are not presented as there were no potential ordinary shares issued during these two years[24] 9. Trade Receivables Both total trade receivables and the provision for impairment losses decreased, with the company granting credit periods of 7 to 45 days and a high proportion of short-term receivables in the aging analysis Trade Receivables and Provision for Impairment Losses | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables | 24,731 | 41,601 | | Less: Provision for impairment losses | (4,777) | (2,652) | | Net | 19,954 | 38,949 | Aging Analysis of Trade Receivables | Aging | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 14,182 | 29,147 | | 31 to 60 days | 3,888 | 3,571 | | 61 to 90 days | 1,884 | – | | 91 to 365 days | – | 1,539 | | Over 365 days | – | 4,692 | | Total | 19,954 | 38,949 | 10. Contract Assets and Contract Liabilities Both contract assets and contract liabilities decreased, with contract assets primarily representing rights to consideration for completed but unbilled work, which convert to trade receivables when unconditional Contract Assets and Contract Liabilities | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Contract assets | | | | Foundation engineering services | 43,526 | 81,137 | | Less: Provision for impairment losses | (211) | (2,334) | | Net contract assets | 43,315 | 78,803 | | Contract liabilities | | | | Foundation engineering services | 2,423 | 4,263 | - Contract assets primarily relate to the Group's rights to consideration for work completed but not yet billed, as these rights are conditional on the Group's future performance[27] 11. Trade Payables Total trade payables significantly decreased, with credit terms ranging from 0 to 60 days, and the aging analysis showing a substantial reduction in payables over 60 days Aging Analysis of Trade Payables | Aging | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 6,479 | 7,449 | | 31 to 60 days | 6,514 | 12,256 | | Over 60 days | 2,526 | 17,338 | | Total | 15,519 | 37,043 | - The credit period for trade payables ranges from 0 to 60 days[29] 12. Share Capital The company's authorized and issued and fully paid share capital remained unchanged during the reporting period, consisting of 800,000,000 shares with a par value of HK$0.01 each Share Capital Structure | Item | Number of Shares | Amount (HK$ Thousand) | | :--- | :--- | :--- | | Authorized share capital (par value HK$0.01 per share) | 2,000,000,000 | 20,000 | | Issued and fully paid share capital (par value HK$0.01 per share) | 800,000,000 | 8,000 | 13. Contingent Liabilities The company was involved in two lawsuits with Sun Ming Construction Limited, which were later consolidated, and Ming Lee Foundation Engineering accepted a payment of HK$9,300,000 on February 9, 2024, to resolve all consolidated actions - Ming Lee Foundation Engineering, an indirect wholly-owned subsidiary of the Company, received two writs of summons from Sun Ming Construction Limited alleging overpayments of approximately HK$441,000 and HK$2,001,000 respectively, later revised to approximately HK$4,588,000[30] - Ming Lee Foundation Engineering filed defenses and counterclaims against Sun Ming Construction Limited and Sun Ming Construction for unpaid amounts of approximately HK$4,764,000 and HK$5,536,000 for six completed construction projects[30] - A notice of acceptance of payment with conditions was issued on February 9, 2024, whereby Ming Lee Foundation Engineering accepted a total payment of HK$9,300,000 into court to settle all consolidated actions[30] Management Discussion and Analysis The Management Discussion and Analysis section reviews the Group's business performance, market outlook, key risks and uncertainties, and elaborates on financial review, capital structure, liquidity, financial resources, employee information, and corporate governance Business Review The Group primarily provides foundation engineering services in Hong Kong, with revenue decreasing by 18.8% to HK$194.0 million for the year ended March 31, 2024, mainly due to selecting reputable clients to improve credit control in a challenging business environment - The Group is a main contractor in Hong Kong primarily engaged in providing foundation engineering services, including excavation and lateral support works, pile cap works, and piling construction, site formation works, and other ancillary services[32] - For the year ended March 31, 2024, the Group recorded revenue of approximately HK$194.0 million, a decrease of approximately 18.8% compared to approximately HK$239.0 million in the same period last year[32] - The decrease in revenue was due to selecting clients with good track records of settling receivables to improve the Group's credit control in response to a challenging business environment[32] Outlook Directors anticipate a continued slowdown in Hong Kong's private property market, with the construction industry facing economic uncertainty, reduced opportunities, increased competition, and rising construction costs, while the Group will maintain prudent financial management and enhance operational capabilities - The Directors believe that the general outlook and business environment for the industry in which the Group operates remain challenging, with the Hong Kong private property market expected to remain slow, adversely affecting the construction industry[33] - High interest rates lead to increased construction costs, impacting profitability[33] - The Group will adhere to prudent financial management in project selection and cost control, and will continue to obtain other qualifications and enhance its financial resources, investing in human and information systems to improve its operational capabilities and efficiency[33] Key Risks and Uncertainties The Group's main risks include high revenue reliance on non-recurring contracts and a few clients, the risk of subcontractor non-performance, and potential deviations of actual project time and costs from estimates - A significant portion of the Group's revenue is derived from non-recurring contracts awarded by a few clients, and any reduction in the number of projects from the Group's major clients will adversely affect its operations and financial results[34] - The Group may be held responsible for non-performance, delayed performance, non-compliant performance, or breaches by its subcontractors[34] - The Group determines tender prices based on estimated time and costs involved in projects, and actual time and costs incurred may deviate from estimates due to unforeseen circumstances[34] Financial Review This section details the changes in the Group's revenue, direct costs, gross profit, other income, administrative expenses, and ultimately net profit (loss), along with their primary causes Revenue The Group's revenue decreased by 18.8% from HK$239.0 million in 2023 to HK$194.0 million in 2024, primarily due to the economic downturn in the construction industry and client selection for improved credit control - The Group's revenue decreased by approximately 18.8% from approximately HK$239.0 million for the year ended March 31, 2023, to approximately HK$194.0 million for the year ended March 31, 2024[35] - This decrease was mainly due to the economic downturn in the construction industry and the selection of clients with good track records of settling receivables to improve the Group's credit control in response to a challenging business environment[35] Direct Costs The Group's direct costs decreased significantly by 32.6% from HK$245.5 million in 2023 to HK$165.4 million in 2024 - The Group's direct costs for the year ended March 31, 2024, were approximately HK$165.4 million, a decrease of approximately 32.6% compared to approximately HK$245.5 million for the year ended March 31, 2023[36] Gross Profit (Loss) and Gross Profit (Loss) Margin The Group's gross profit turned from a loss of HK$6.6 million in 2023 to a profit of HK$28.6 million in 2024, with the gross profit margin improving from -2.8% to 14.8%, primarily due to close monitoring of project costs and schedules, reducing loss-making contracts - The Group's gross profit for the year ended March 31, 2024, was approximately HK$28.6 million, compared to a gross loss of approximately HK$6.6 million for the year ended March 31, 2023[37] - The gross profit margin improved from approximately -2.8% for the year ended March 31, 2023, to approximately 14.8% for the year ended March 31, 2024[37] - The improvement in gross profit margin was mainly due to the Group's close monitoring of construction project costs and schedules to mitigate the risk of loss-making contracts[37] Other Income Other income decreased from HK$2.9 million in 2023 to HK$1.4 million in 2024, primarily due to the absence of approximately HK$2.2 million in government grants received in the prior period - Other income decreased from approximately HK$2.9 million for the year ended March 31, 2023, to approximately HK$1.4 million for the year ended March 31, 2024[38] - This decrease was mainly due to the absence of government grants of approximately HK$2.2 million received under the Employment Support Scheme for the year ended March 31, 2023[38] Administrative Expenses The Group's administrative expenses for 2024 were approximately HK$27.7 million, remaining at a similar level compared to HK$27.4 million in 2023 - The Group's administrative expenses for the year ended March 31, 2024, were approximately HK$27.7 million, remaining at a similar level compared to approximately HK$27.4 million for the year ended March 31, 2023[39] Profit (Loss) and Total Comprehensive Income (Expense) for the Year Attributable to Owners of the Company The Group recorded a net profit of approximately HK$0.7 million in 2024, successfully reversing a net loss of approximately HK$30.0 million in the corresponding period of 2023 - For the year ended March 31, 2024, the Group recorded a net profit of approximately HK$0.7 million, compared to a net loss of approximately HK$30.0 million in the corresponding period of 2023[41] Capital Structure, Liquidity and Financial Resources The Group's capital structure remained unchanged, with liquidity primarily funded by operating cash, bank borrowings, and shareholders' equity contributions, showing increased bank balances, slightly increased total equity, and significantly reduced total debt, enhancing financial stability Capital Structure The Group's capital structure remained unchanged for the year ended March 31, 2024, consisting solely of ordinary shares - The Group's capital structure remained unchanged for the year ended March 31, 2024, consisting solely of ordinary shares[42] Liquidity and Financial Resources The Group primarily funds its liquidity and capital requirements through cash generated from operations, bank borrowings, and shareholders' equity contributions, with significantly increased bank balances, slightly increased total equity, and substantially reduced total debt - The Group primarily funds its liquidity and capital requirements through cash generated from operations, bank borrowings, and shareholders' equity contributions[43] Liquidity and Financial Resources Overview | Metric | 2024 (HK$ Million) | 2023 (HK$ Million) | | :--- | :--- | :--- | | Bank balances | 29.9 | 12.6 | | Total equity attributable to owners of the Company | 77.4 | 76.8 | | Total debt | 63.5 | 102.4 | Bank Borrowings and Gearing Ratio The Group's bank borrowings decreased to HK$22.2 million, and the gearing ratio significantly dropped from 133.3% to 82.0%, indicating reduced financial leverage and enhanced debt repayment capability - As of March 31, 2024, the Group's bank borrowings were approximately HK$22.2 million (2023: approximately HK$29.3 million)[44] - The Group's gearing ratio (calculated as total debt divided by total equity) was approximately 82.0% (2023: approximately 133.3%)[44] Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Plans for Material Investments or Capital Assets For the year ended March 31, 2024, the Company had no significant investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures, nor any other plans for material investments or capital assets - Save as disclosed in this announcement, for the year ended March 31, 2024, the Company had no significant investments, material acquisitions, or disposals of subsidiaries, associates, and joint ventures[45] - As of March 31, 2024, the Group had no other plans for material investments or capital assets[45] Pledge of the Group's Assets The Group has pledged machinery and construction equipment, as well as life insurance policy payments, to banks and financial institutions as collateral for short-term bank loans and general banking facilities - As of March 31, 2024, the Group had pledged machinery and construction equipment with an aggregate net book value of approximately HK$16.3 million (March 31, 2023: approximately HK$21.2 million) to banks and a financial institution[47] - As of March 31, 2024, life insurance policy payments of approximately HK$4.1 million were pledged to banks to secure banking facilities granted to the Group (2023: approximately HK$4.0 million)[47] Foreign Exchange Risk All of the Group's business and bank borrowings are denominated in Hong Kong dollars, so the Directors believe there is no significant foreign exchange risk, and while no hedging policy is currently in place, it will be reviewed and applied as necessary - All of the Group's revenue-generating business and bank borrowings are denominated in Hong Kong dollars (the Group's presentation currency), therefore, the Directors believe that the Group is not exposed to significant foreign exchange risk[48] - The Group currently does not have a foreign currency hedging policy, but the Board will review the Group's foreign exchange risk and exposure from time to time and apply hedging as necessary[48] Treasury Policy The Directors will continue to follow a prudent policy in managing cash balances and maintaining robust liquidity to capitalize on future growth opportunities - The Directors will continue to follow a prudent policy in managing the Group's cash balances and maintaining robust liquidity to ensure the Group is well-prepared to capitalize on future growth opportunities[49] Contingent Liabilities The Group's significant contingent liabilities are disclosed in Note 13 - As of March 31, 2024, the Group's significant contingent liabilities are set out in Note 13 to this announcement[50] Capital Commitments As of March 31, 2024, the Group had no significant capital commitments for the acquisition of property and equipment - As of March 31, 2024, the Group had no significant capital commitments for the acquisition of property and equipment (2023: nil)[51] Segment Information The Group primarily operates in one business segment, which is the provision of foundation engineering services - The Group primarily operates in one business segment, which is the provision of foundation engineering services[52] Information on Employees As of March 31, 2024, the Group had 88 full-time employees, a decrease from the previous year, with total staff costs amounting to approximately HK$40.8 million, also lower than last year - As of March 31, 2024, the Group had 88 full-time employees working in Hong Kong (2023: 98 employees)[54] - Total staff costs (including directors' remuneration and mandatory provident fund contributions) for the year ended March 31, 2024, were approximately HK$40.8 million (2023: approximately HK$54.1 million)[54] Dividends The Board does not recommend the payment of any final dividend for the year ended March 31, 2024 - The Board does not recommend the payment of any final dividend for the year ended March 31, 2024 (2023: nil)[55] Events After Reporting Period Save as disclosed in this announcement, the Board is not aware of any significant events from March 31, 2024, up to the date of this announcement - Save as disclosed in this announcement, the Board is not aware of any significant events from March 31, 2024, up to the date of this announcement[56] Standard Code for Securities Transactions by Directors The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all Directors fully complied with it during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[57] - Following specific enquiries, all Directors confirmed full compliance with the required standards set out in the Model Code for the year ended March 31, 2024, with no instances of non-compliance[57] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the year ended March 31, 2024 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the year ended March 31, 2024[58] Audit Committee The Audit Committee, comprising three independent non-executive directors and chaired by Mr. Ho Chun Chung, has reviewed the annual consolidated financial statements, confirming their compliance with applicable accounting standards and Listing Rules, and adequate disclosure - The Audit Committee is chaired by Mr. Ho Chun Chung, an independent non-executive Director, with other members including independent non-executive Directors Mr. Chong Kam Fung and Mr. Sze Wai Lim[59] - The primary responsibilities of the Audit Committee include reviewing financial information and overseeing the financial reporting system, internal control system, risk management system, and the relationship with external auditors[61] - The Group's consolidated financial statements for the year ended March 31, 2024, have been reviewed by the Audit Committee, which believes that the consolidated financial statements comply with applicable accounting standards and the Listing Rules, and that adequate disclosures have been made[61] Scope of Work of National Alliance CPA Limited The Group's auditor, National Alliance CPA Limited, has reconciled the figures in the preliminary announcement with the audited consolidated financial statements, but their work does not constitute an assurance engagement, thus no opinion or assurance conclusion is expressed - The Group's auditor, National Alliance CPA Limited, has reconciled the figures in the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and related notes for the year ended March 31, 2024, as set out in the preliminary announcement, with the figures in the Group's audited consolidated financial statements for that year[62] - The work performed by National Alliance CPA Limited in this regard does not constitute an assurance engagement, and therefore, National Alliance CPA Limited has not expressed an opinion or assurance conclusion on the preliminary announcement[62] Review of the Annual Consolidated Financial Statements The Company's Audit Committee, in conjunction with the auditor, has reviewed the annual audited consolidated financial statements, confirming their preparation in accordance with applicable accounting standards and fair presentation of the Group's financial position and full-year results as of March 31, 2024 - The Company's Audit Committee (comprising three independent non-executive Directors of the Company) has reviewed the annual audited consolidated financial statements for the current year in conjunction with the Group's auditor, National Alliance CPA Limited[63] - Based on this review and discussions with the Company's management, the Audit Committee is satisfied that the audited consolidated financial statements have been prepared in accordance with applicable accounting standards and fairly present the Group's financial position as of March 31, 2024, and its full-year results for the year ended March 31, 2024[63]