Financial Performance - The Group's revenue for the first six months of 2019 was HK$544,498,000, representing a decrease of 9.72% compared to the same period in 2018[6]. - The Group's net profit was HK$10,138,000, a decrease of 63% from HK$27,468,000 in the corresponding period of 2018[6]. - The significant decrease in net profit was attributed to the Sino-US trade dispute and macroeconomic factors, including a weakening Renminbi and British Pounds[6]. - Revenue for the six months ended June 30, 2019, was HK$544,498, a decrease of 9.7% compared to HK$603,149 for the same period in 2018[96]. - Gross profit for the period was HK$61,939, down 33.4% from HK$92,973 in the previous year[96]. - Profit attributable to equity shareholders for the period was HK$10,138, representing a decline of 63.1% from HK$27,468 in 2018[99]. - Basic earnings per share decreased to 2.05 HK cents, down 63.6% from 5.63 HK cents in the prior year[96]. - Total comprehensive income for the period attributable to equity shareholders was HK$8,440, a decrease of 64.0% compared to HK$23,461 in 2018[99]. - For the six months ended June 30, 2019, the profit before taxation was HK$11,622,000, a decrease of 62.9% compared to HK$31,317,000 for the same period in 2018[117]. - Operating profit before changes in working capital was HK$26,945,000, down 42.4% from HK$46,777,000 in the previous year[117]. - The total comprehensive income for the period as of June 30, 2019, was HK$591,223,000, compared to HK$606,295,000 as of June 30, 2018[114]. Cash Flow and Investments - Cash generated from operations increased significantly to HK$63,127,000, compared to HK$9,482,000 in the same period last year[117]. - Net cash generated from operating activities was HK$59,381,000, a substantial increase from HK$6,553,000 in the prior year[117]. - The net cash used in investing activities was HK$10,429,000, compared to HK$33,655,000 in the previous year, indicating a reduction in investment outflows[119]. - The net cash used in financing activities was HK$28,942,000, an increase from HK$12,295,000 in the prior year, primarily due to higher dividend payments[119]. - The company approved dividends of HK$29,208,000 for the period, compared to HK$19,321,000 in the previous year[119]. Research and Development - The Group invested HK$12,463,000 in R&D related capital expenditure during the first half of 2019, down from HK$35,131,000 in the same period of 2018[10]. - The Group plans to launch a portfolio of new products in the beverage, shaving & grooming, and air purification categories over the next six months[15]. - The management aims to transform facilities into a "smart factory" to improve production efficiency[15]. - Product development costs for the first half of 2019 amounted to HK$17,180,000, up from HK$15,240,000 in the same period of 2018[168]. Financial Position - The Group's current ratio improved to 3.24 as of June 30, 2019, compared to 2.78 on December 31, 2018[24]. - The quick ratio also increased to 2.52 as of June 30, 2019, up from 2.05 at the end of 2018[24]. - The gearing ratio decreased to 0.30 as of June 30, 2019, from 0.38 on December 31, 2018[24]. - Bank balances and cash were HK$209,994,000 as of June 30, 2019, a decrease of HK$14,001,000 from approximately HK$223,995,000 on June 30, 2018[25]. - The Group had no bank borrowings or contingent liabilities as of June 30, 2019[25][29]. - Current assets decreased to HK$584,458 from HK$652,973 at the end of 2018, reflecting a decline of 10.5%[103]. - Net current assets were HK$404,309, down from HK$418,379 at the end of 2018, indicating a decrease of 3.3%[103]. - Total equity as of June 30, 2019, was HK$591,223, a decrease of 3.4% from HK$612,169 at the end of 2018[105]. - Total assets as of June 30, 2019, were HK$771,553,000, a decrease of 9% from HK$846,944,000 at the end of 2018[159]. Corporate Governance - The Company complies with the Corporate Governance Code, with a noted deviation regarding the service term of independent non-executive directors[61]. - The Company has established a Remuneration Committee in accordance with the CG Code requirements[69]. - The company has established a Nomination Committee comprising four independent non-executive Directors to comply with the CG Code requirements[77]. - The company has confirmed that all directors complied with the standard code of conduct during the six months ended June 30, 2019[71]. - The company has taken measures to ensure that its corporate governance level meets or exceeds the requirements of the conventional code[70]. - The independent non-executive Director, Mr. Leung, resigned from his position effective August 1, 2019[82]. Shareholder Information - As of June 30, 2019, the total number of issued shares of the company was 494,204,860 ordinary shares[49]. - Executive Director Dr. Wong, Wilson Kin Lae held 106,025,181 shares, representing 21.45% of the total issued shares[47]. - Mr. Wong, John Ying Man held 18,639,448 shares, accounting for 3.77% of the total issued shares[47]. - Dr. Wong, Raymond Man Hin owned 16,217,972 shares, which is 3.28% of the total issued shares[47]. - The company had no share options granted or cancelled during the six months ended June 30, 2019[44]. - The interests of substantial shareholders holding 5% or more of the company's issued share capital were recorded as of June 30, 2019[52]. Segment Performance - Revenue from the United States segment for the six months ended June 30, 2019, was HK$137,232,000, compared to HK$134,808,000 in the same period of 2018, reflecting a growth of 1.05%[151]. - The reportable segment profit (adjusted EBITDA) for the United States was HK$5,129,000 for the six months ended June 30, 2019, down from HK$9,224,000 in 2018, indicating a decline of 44.5%[151]. - Total reportable segment revenue for the six months ended June 30, 2019, was HK$1,179,254,000, compared to HK$1,339,058,000 in 2018, representing a decrease of 11.97%[151]. - The reportable segment profit (adjusted EBITDA) for the entire group was HK$44,929,000 for the six months ended June 30, 2019, down from HK$90,098,000 in 2018, a decline of 50.16%[151]. Accounting Policies - The interim financial information is prepared based on accounting policies similar to those used in the 2018 annual financial statements, with no significant changes affecting the current or prior periods[129]. - The Group has adopted HKFRS 16, which requires recognition of a right-of-use asset and lease liability for all leases, except for short-term leases and low-value assets[133]. - The interim financial information has been reviewed by the Audit Committee and the Company's auditor, ensuring compliance with Hong Kong standards[131]. - The auditor's report on the financial statements was unqualified, indicating no significant issues were raised[131].
利民实业(00229) - 2019 - 中期财报