Financial Performance - For the fiscal year ending March 31, 2024, the Group reported revenue of HK$2,571 million from Mainland China, a slight increase from HK$2,560 million in the previous year, demonstrating resilience in a challenging economic environment[9] - The Group's revenue for the year ended 31 March 2024 was HK$3,639 million, a slight decrease of 1.8% year-on-year from HK$3,705 million[25] - Gross profit decreased by 3.2% year-on-year to HK$1,151 million, with a gross profit margin of 31.6% compared to 32.1% in the previous year[25] - Profit attributable to owners of the Company dropped by 15.3% year-on-year to HK$250 million, down from HK$295 million[25] - Sales in Hong Kong decreased by 6.3% year-on-year to HK$944 million, down from HK$1,008 million[31] - The Greater China region's retail sales performance remained stagnant, influenced by macroeconomic uncertainties and a troubled real estate industry[25] - The Group's established brand profile and stringent cost control measures helped maintain revenue levels despite market challenges[25] Dividends and Equity - A final dividend of HK$0.058 per share and a special dividend of HK$0.172 per share were proposed, down from HK$0.075 and HK$0.220 respectively in the previous year, indicating confidence in long-term prospects despite a decrease in dividends[9] - The Board recommended a final dividend of 5.8 HK cents per share and a special dividend of 17.2 HK cents per share, reflecting confidence in the Group's long-term prospects[27] - Total equity as of March 31, 2024, reached HK$1,796 million, down from HK$1,896 million as of March 31, 2023[39] - The Company does not have a formal dividend policy, with future dividends decided based on various factors including market conditions and financial position[150] Retail Expansion and Strategy - The Group plans to continue expanding its retail presence in prime shopping areas across Hong Kong, Macau, and Mainland China, targeting a younger demographic to enhance market position[11] - The Group operates 44 retail points in the Greater China region, including one online store in Mainland China and one in Hong Kong, reflecting a strategic focus on expanding its retail network[9] - The relocation of the Causeway Bay store to a more vibrant area aims to capture changing consumer preferences and attract a broader customer base[11] - The Group's strategic initiatives include opening multiple boutique stores in Mainland China with lower capital investment to strengthen relationships with brand owners[9] - The Group aims to expand its network with limited capital input while diversifying its product mix[37] Inventory Management - The Group's inventory increased by 5.0% year-over-year to HK$443 million, up from HK$422 million in 2023, reflecting proactive measures to align inventory with market demand[14] - The Group has implemented a stringent inventory policy to optimize management and reduce carrying costs, ensuring a healthy financial position[14] Corporate Governance - The Board of Directors comprises five members, including the Chairman and Group Managing Director, with a balanced composition ensuring relevant expertise in the Group's business[49] - The Company is committed to providing good corporate governance practices and procedures, ensuring accountability to shareholders[50] - The company complied with the Corporate Governance Code throughout the year ended March 31, 2024, with some deviations explained in relevant paragraphs[74] - The Board meets regularly, at least four times a year, to oversee the management of the business and ensure effective corporate governance practices[56] - The Company Secretary is responsible for ensuring that Board procedures are followed and activities are conducted efficiently[94] Risk Management - The Group's risk management framework is consistent with the COSO framework, providing a clear governance structure and reporting mechanism[153] - Risk management reports are submitted to the Audit Committee and the Board at least once a year, with internal control reports submitted semi-annually[157] - The Group has established an internal audit function to assist the Board and Audit Committee in monitoring risk management and internal control systems[158] - The Board evaluates and determines the nature and extent of risks the Company is willing to accept in pursuit of strategic objectives[152] - The Group's risk management policy is reviewed at least annually to identify and prioritize significant risks[156] Employee Development - The Group has developed training programs for senior executives to enhance management skills and foster innovative ideas within the organization[19] - The Group's training programs for employees are tailored based on the results of a "Mystery Shoppers Programme" to improve customer service[40] - Approximately 62% of the Group's 596 employees are located in Mainland China as of March 31, 2024[39] Audit and Compliance - The Audit Committee met four times during the year, with all members in attendance, to oversee financial reporting and compliance with statutory requirements[113] - The Directors acknowledge their responsibility for preparing financial statements that present a true and fair view in accordance with applicable accounting standards[104] - The Audit Committee reviews the Group's financial statements and meets with external auditors to ensure compliance with accounting principles[114] - The Audit Committee holds meetings with Deloitte to discuss the scope of their audit and fees, ensuring appropriate non-audit services are provided[168] Future Outlook - The luxury watch industry is expected to face ongoing challenges in the second half of 2024, with Swiss watch exports to Mainland China and Hong Kong dropping significantly by 22.7% and 25.6% year-on-year, respectively, in Q1 2024[62] - The decline in Swiss watch exports indicates a slowdown in inventory turnover among distributors and a reluctance towards inventory replenishment, reflecting a challenging luxury retail market in 2024[63] - The primary objective of the Company is to enhance long-term total return for shareholders, focusing on sustainable recurring earning growth and maintaining a strong financial profile[49]
东方表行集团(00398) - 2024 - 年度财报