宝燵控股(08601) - 2024 - 中期业绩

Financial Highlights and Business Overview Financial Summary For the six months ended June 30, 2024, the company's revenue increased by 12.3% year-on-year to HKD 88.811 million, but profit attributable to equity holders decreased by 8.6% to HKD 12.062 million due to faster cost growth and reduced other income, with basic earnings per share falling to HK 1.51 cents from HK 1.65 cents Key Financial Indicators for H1 2024 | Indicator | For the six months ended June 30 (2024) | For the six months ended June 30 (2023) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 88.811 million | HKD 79.051 million | +12.3% | | Gross Profit | HKD 29.843 million | HKD 28.879 million | +3.3% | | Profit before income tax | HKD 13.622 million | HKD 15.185 million | -10.3% | | Profit for the period | HKD 12.062 million | HKD 13.200 million | -8.6% | | Basic earnings per share | HK 1.51 cents | HK 1.65 cents | -8.5% | Business Overview and Outlook The Group, an engineering consultant focused on Hong Kong's infrastructure development, covers civil, traffic, building, and landscape engineering, maintaining cautious optimism on business prospects and actively seeking to expand its client base and market share - The Group primarily provides engineering design, landscape architecture, and consultancy services in Hong Kong[8] - The Board maintains a cautious yet optimistic outlook on the Group's business prospects and plans to actively expand its client base and market share[31][32] Unaudited Condensed Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, Group revenue grew 12.3% to HKD 88.811 million, but increased service costs and administrative expenses, coupled with reduced other income, led to a decline in profit before tax to HKD 13.622 million, with profit attributable to equity holders ultimately decreasing 8.6% to HKD 12.062 million Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 88,811 | 79,051 | | Gross Profit | 29,843 | 28,879 | | Other income | 1,355 | 2,726 | | Administrative expenses | (17,353) | (16,357) | | Profit before income tax | 13,622 | 15,185 | | Profit for the period | 12,062 | 13,200 | Consolidated Statement of Financial Position As at June 30, 2024, the Group's total assets reached HKD 188 million, with net assets increasing to HKD 165 million (end of 2023: HKD 153 million), and net current assets significantly rising to HKD 158 million, indicating a robust financial position Financial Position Summary | Item | June 30, 2024 (HKD thousand) | December 31, 2023 (HKD thousand) | | :--- | :--- | :--- | | Non-current assets | 12,162 | 13,918 | | Current assets | 176,090 | 172,218 | | Current liabilities | 18,221 | 25,814 | | Net current assets | 157,869 | 146,404 | | Net assets | 165,159 | 153,097 | | Total equity | 165,159 | 153,097 | Consolidated Statement of Changes in Equity For the six months ended June 30, 2024, the Group's total equity increased from HKD 153 million at the beginning of the period to HKD 165 million, primarily driven by the HKD 12.062 million profit recorded during the period - As at June 30, 2024, total equity reached HKD 165 million, an increase from HKD 153 million at the beginning of the year, primarily due to the HKD 12.062 million profit for the period[6] Consolidated Statement of Cash Flows During the reporting period, cash flow from operating activities turned positive, with a net inflow of HKD 6.201 million, while cash flow from investing activities shifted from a significant inflow to a small outflow compared to the prior period, with cash and cash equivalents at period-end increasing to HKD 71.542 million Cash Flow Statement Summary (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Net cash generated from operating activities | 6,201 | (7,227) | | Net cash (used in)/generated from investing activities | (405) | 57,311 | | Net cash used in financing activities | (1,801) | (2,088) | | Cash and cash equivalents at end of period | 71,542 | 127,165 | Notes to the Financial Statements Revenue and Other Income The Group's total revenue increased 12.3% year-on-year to HKD 88.811 million, primarily driven by civil engineering, with remaining performance obligations totaling approximately HKD 297 million as of period-end, while other income significantly decreased 50.3% due to lower bank interest income Revenue by Service Type (For the six months ended June 30) | Service Type | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Civil Engineering | 69,512 | 64,514 | | Traffic Engineering | 12,390 | 11,528 | | Building Engineering | 3,015 | 2,763 | | Landscape Architecture | 2,887 | – | | Other Ancillary Services | 1,007 | 246 | | Total | 88,811 | 79,051 | - As at June 30, 2024, the Group's total remaining performance obligations expected to be recognized in the future amounted to HKD 297 million[11][12] - Other income decreased from HKD 2.726 million in the prior period to HKD 1.355 million, primarily due to a reduction in bank interest income from HKD 2.13 million to HKD 0.681 million[13] Key Expense Items During the reporting period, total staff costs, the largest expense item, increased 19.3% year-on-year to HKD 55.969 million, with HKD 50.372 million included in cost of services, while subcontracting consultant fees also significantly rose 61.8% to HKD 7.232 million Key Expense Summary (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Total staff costs | 55,969 | 46,933 | | Depreciation | 2,893 | 2,763 | | Subcontracting consultant fees | 7,232 | 4,468 | Dividends The Board has declared an interim dividend of HKD 0.05625 per ordinary share for the six months ended June 30, 2024, totaling HKD 45 million, compared to HKD 65 million in the prior period - The Board declared an interim dividend of HKD 0.05625 per ordinary share for 2024, totaling HKD 45 million[21] Management Discussion and Analysis Financial Review The period's financial performance showed revenue growth but pressured profitability, with revenue up 12.3% due to new projects, but direct costs rising 17.5% from increased labor, leading to only a 3.3% gross profit increase, while other income halved due to lower interest, and administrative expenses rose 6.1% from an acquisition Revenue - Revenue increased 12.3% year-on-year to approximately HKD 88.8 million, primarily due to an increase in projects awarded during the period[33] Costs and Gross Profit - Direct costs increased 17.5% year-on-year to approximately HKD 59 million, primarily due to higher direct labor costs[34] - Gross profit increased 3.3% year-on-year to approximately HKD 29.8 million, benefiting from increased productivity due to a higher number of technical staff[35] Other Income and Administrative Expenses - Other income decreased 50.3% year-on-year to approximately HKD 1.4 million, primarily due to reduced bank interest income from fixed deposits[36] - Administrative expenses increased 6.1% year-on-year to approximately HKD 17.4 million, mainly due to the acquisition of a landscape architecture company[37] Liquidity and Financial Resources The Group maintains a robust financial position, primarily funding operations through cash generated from operating activities, with cash and bank balances of approximately HKD 71.5 million and net current assets of HKD 158 million at period-end, and a zero gearing ratio with no bank borrowings Liquidity Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and bank balances | HKD 71.5 million | HKD 67.5 million | | Net current assets | HKD 157.9 million | HKD 146.4 million | | Total equity | HKD 165.2 million | HKD 153.1 million | - As at June 30, 2024, the Group's gearing ratio was zero[48] Employee and Remuneration Policy As at June 30, 2024, the Group employed 446 staff, offering competitive remuneration and regularly reviewing human resources policies for compliance, complemented by a share option scheme to incentivize and retain talent - As at June 30, 2024, the Group had 446 employees (including directors)[45] - The Group offers attractive remuneration packages and has a share option scheme to incentivize employees[46] Other Disclosures Disclosure of Interests As at June 30, 2024, Executive Director Mr. Cheung Kwan Tat, through his controlled entity Wai Wing Investment Holdings Limited, held 67.65% of the company's shares, making him the controlling shareholder, while Mr. Cheng Chi Hang held 7.35% Major Shareholders' Shareholding | Shareholder Name | Nature of Interest | Number of Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Cheung Kwan Tat | Interest in controlled corporation | 541,200,000 | 67.65% | | Wai Wing Investment Holdings Limited | Beneficial owner | 541,200,000 | 67.65% | | Cheng Chi Hang | Beneficial owner | 58,800,000 | 7.35% | Corporate Governance The company is committed to maintaining high corporate governance standards, complying with GEM Listing Rules' Corporate Governance Code during the period, with the sole deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Cheung Kwan Tat, an arrangement the Board believes enhances decision-making efficiency and will be regularly reviewed - The company deviated from Code Provision C.2.1 of the Corporate Governance Code, where the roles of Chairman and Chief Executive Officer are not segregated and are both held by Mr. Cheung Kwan Tat[56] - The Board believes that combining the roles of Chairman and Chief Executive Officer facilitates the execution of business strategies and provides strong, consistent leadership, thereby enhancing decision-making efficiency[56] Audit Committee The Audit Committee, comprising three independent non-executive directors, oversees the company's financial reporting processes and internal control systems, and has reviewed the unaudited interim results for the current period - The Audit Committee comprises three independent non-executive directors: Ms. Chik Wai Chun, Mr. Pang Chun Sing, and Mr. Chan Kai Kau[60] - The Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2024[60] Post-Reporting Period Events On July 16, 2024, Mr. Pang Chun Sing was appointed as a new independent non-executive director, also serving as Chairman of the Remuneration Committee and a member of the Audit and Nomination Committees - On July 16, 2024, Mr. Pang Chun Sing was appointed as a new independent non-executive director of the company[61]