GIORDANO INT'L(HK:00709)2024-08-15 04:04Revenue Performance - The group's revenue remained flat year-on-year at fixed exchange rates, with a decline of 3.4% due to currency effects. The GCC region saw a revenue increase of 0.6%, while Southeast Asia and Australia rose by 6.7%. However, Greater China experienced a further decline of 5.1% year-on-year[2]. - The group reported a total revenue of HKD 1,903 million for the six months ended June 30, 2024, compared to HKD 1,970 million for the same period in 2023, reflecting a decrease of approximately 3.4%[11]. - Revenue in Greater China for the six months ended June 30, 2024, was HKD 709 million, a decrease of 5.1% compared to HKD 747 million in 2023[41]. - Revenue in Southeast Asia and Australia for the first half of 2024 reached HKD 783 million, a 6.7% increase from HKD 734 million in the same period of 2023[42]. - The retail and distribution segment in mainland China generated sales of HKD 300 million, while the sales in Hong Kong and Macau were HKD 182 million, showing a year-on-year decrease of 5.5% and 8.5% respectively[11]. Profitability - Gross profit margin recorded at 58.9%, an increase of 0.2 percentage points, primarily due to changes in channel mix. However, gross profit decreased by 3.1% year-on-year due to adverse currency effects[2]. - Net profit attributable to shareholders was HKD 120 million, down from HKD 190 million in 2023, attributed to one-off non-recurring expenses in 2024 and a significant decrease in profits from the Greater China region[2]. - Basic earnings per share decreased to HKD 0.074 from HKD 0.120 in 2023[3]. - Operating profit for the six months ended June 30, 2024, was HKD 811 million, slightly down from HKD 815 million in 2023, reflecting a decrease of 0.49%[16]. - The group's operating profit for the retail and distribution segment was HKD 232 million for the six months ended June 30, 2024, compared to HKD 284 million in the same period of 2023, representing a decline of approximately 18.3%[13]. Expenses and Costs - Operating expenses as a percentage of revenue increased by 2.9 percentage points, rising from 46.6% to 49.5%, mainly due to one-off non-recurring expenses related to a special general meeting[2]. - The group's financing costs amounted to HKD 22 million for the reporting period, reflecting a stable cost structure compared to previous periods[11]. - Interest expenses on lease liabilities increased to HKD 22 million from HKD 17 million, marking a rise of 29.41%[17]. - Total tax expense for the six months ended June 30, 2024, was HKD 53 million, an increase of 6% from HKD 50 million in 2023[19]. Cash Flow and Financial Position - Cash inflow from operating activities was HKD 265 million, with a net cash balance of HKD 720 million as of June 30, 2024, despite negative impacts from foreign exchange differences[3]. - Total assets decreased to HKD 3,668 million from HKD 3,856 million as of December 31, 2023[6]. - Total liabilities decreased slightly to HKD 1,514 million from HKD 1,544 million as of December 31, 2023[6]. - Cash and bank balances, after deducting bank loans, decreased to HKD 720 million from HKD 1,014 million in 2023, indicating a significant cash flow reduction[48]. Inventory Management - Inventory remained stable at HKD 514 million, with inventory turnover days increasing by eight days to 119 days[3]. - The group's inventory as of June 30, 2024, is HKD 514 million, an increase from HKD 474 million on December 31, 2023, and a decrease from HKD 501 million on June 30, 2023[52]. - The accounts receivable net value decreased to HKD 171 million from HKD 197 million, a decline of 13.19%[22]. - Total accounts payable decreased to HKD 496 million from HKD 552 million, a reduction of 10.16%[24]. Strategic Initiatives - The company aims for revenue growth to stabilize at 2023 levels in 2024, with a target of achieving positive growth in the second half of 2024[55]. - The core of the "Beyond Boundaries" strategy is to revitalize the Giordano brand and expand its digital footprint, particularly in mainland China[57]. - The company recognizes the need to enhance organizational capabilities and will develop a comprehensive IT roadmap and restructure team functions[56]. - Giordano's five-year strategy "Beyond Limits" aims to regain leadership in the Greater China fashion apparel market and accelerate growth in the Gulf Cooperation Council and Southeast Asia, targeting a high single-digit to low double-digit CAGR from 2025 to 2030[61]. Shareholder Returns - The board declared an interim dividend of HKD 0.08 per share, down from HKD 0.17 per share in 2023[3]. - The interim dividend for the six months ending June 30, 2024, is set at HKD 0.08 per share, down from HKD 0.17 per share in 2023, reflecting careful consideration of economic outlook and financial status[63]. - Basic and diluted earnings per share for the period were HKD 0.74, down from HKD 1.19 in 2023, representing a decline of 37.02%[20]. Employee and Governance - As of June 30, 2024, the group has approximately 6,800 employees, with a focus on competitive compensation and performance-based bonuses to retain a high-quality leadership team[62]. - The board includes four executive directors and seven non-executive directors, ensuring a diverse governance structure[74].