Financial Performance - For the year ended June 30, 2020, the company reported revenue of HK$1,092 million, a 27% increase from HK$767 million in the previous year[7]. - Group revenue for the year ended June 30, 2020, was HK$1,092 million, a decrease of 27% from HK$1,488 million in 2019[35]. - Revenue from Hong Kong and Macau accounted for 66% of total revenue, while Mainland China contributed 27%[10]. - Revenue in Hong Kong and Macau, including retail and export franchising, was HK$716 million, representing a 32% decline from HK$1.052 billion in 2019[65]. - Revenue in mainland China decreased by 11% to HK$296 million (2019: HK$332 million) with same-store sales dropping 8%[71]. - Singapore's revenue dropped by 23% to HK$80 million (2019: HK$104 million) with same-store sales registering an 11% decline[72]. - The Group's top- and bottom-line performance substantially deteriorated in the second half of the financial year due to declining tourism and consumer spending[21]. - Loss attributable to owners of the Company was HK$368 million, an increase of 164% from HK$139 million in 2019[35]. - Loss attributable to the company's owners increased by 164%, with a net profit margin of -34%, up 25 percentage points from -9% in 2019[51]. Operational Efficiency - The gross profit margin decreased to 49% from 52%, reflecting a 3 percentage point decline[7]. - Gross profit decreased by 30% to HK$534 million, with a gross margin of 49%, down from 52% in 2019[41]. - Total operating expenses increased to 81% of sales, up from 62% in 2019[42]. - Operating loss rose by 209% to HK$319 million, compared to HK$103 million in 2019[42]. - The company is currently reviewing expenses and adjusting inventory levels to improve operational efficiency[35]. - The Group is examining expenditure with a focus on reducing costs and increasing operational efficiency[22]. - The Group is continuously reviewing its shop portfolio and exiting specific loss-making sectors[22]. Store Management - Directly managed stores in Mainland China decreased to 154 from 175, a reduction of 21 stores[7]. - The total number of directly managed stores globally decreased to 209 from 286, a decline of 77 stores[7]. - Same-store sales declined by 14%, while same-store gross profit fell by 21%[35]. - Same-store sales for directly managed stores fell by 19%, while same-store gross profit declined by 27%[65]. - The total number of stores operated in the export franchising business was 773, a slight decrease from 775 in 2019, with operations across 25 countries[66]. Liquidity and Financial Position - The current ratio fell to 1.49 from 3.42, indicating a decline in liquidity[9]. - The company’s net cash position decreased to HK$116 million from HK$132 million[9]. - As of June 30, 2020, the Group had cash and bank balances of HK$176 million (2019: HK$162 million) and net cash of HK$116 million (2019: HK$132 million)[73]. - Bank borrowings increased to HK$60 million (2019: HK$30 million) with a gearing ratio of 21% (2019: 4%) as of June 30, 2020[73]. - The return on equity was reported at -75%, a decrease of 57 percentage points from -18% in the previous year[9]. Market Conditions - The COVID-19 outbreak and its classification as a pandemic have intensified the already difficult operating environment in core markets[20]. - The economic environment in core markets has been adversely affected by trade tensions, local incidents, and the COVID-19 pandemic, leading to slower growth or contraction in retail sales[100]. - Visitor arrivals in Hong Kong and Macau slumped over 80% according to local travel industry data[21]. - The Group anticipates continued strong headwinds and does not expect a solid rebound in overall performance due to ongoing challenges[23]. - Major banks continue to tighten credit facilities, making it difficult to predict future banking sector measures[23]. Corporate Governance - The company has adopted the Corporate Governance Code as stated in the Listing Rules of The Stock Exchange of Hong Kong Limited, ensuring compliance with the Code Provisions[109]. - The Board currently comprises 9 Directors, including 4 Executive Directors, 2 Non-executive Directors, and 3 Independent Non-executive Directors, reflecting a balance of skills and experience[124]. - The company has complied with the Code Provisions in the Corporate Governance Code, with the exception of the Chairman not being subject to retirement by rotation, which is deemed crucial for business stability[110]. - Independent Non-executive Directors are appointed for specific terms, either 1 year or 3 years, and are subject to retirement by rotation at annual general meetings[143]. - The company has received written annual confirmations from each Independent Non-executive Director regarding their independence, in compliance with the Listing Rules[135]. Management and Board Activities - The management provides monthly management accounts and updates to the Directors to ensure informed decision-making[113]. - The Company has established 4 Board committees to enhance governance and oversight[129]. - The overall management of the company's business is vested in the Board, which is collectively responsible for promoting the business and directing the Group's affairs[112]. - The Board of Directors held 13 meetings during the year ended June 30, 2020, to review and approve the audited annual results for the year ended June 30, 2019, and the unaudited results for the six months ended December 31, 2019[156]. - The Company has established a Nomination Committee to oversee the appointment of new Directors, considering their background, experience, and independence requirements[146]. Remuneration and Employee Management - The Remuneration Committee held 4 meetings during the year and recommended adjustments to the remuneration of Executive Directors and performance bonuses[194]. - For the year ended June 30, 2020, the remuneration of senior management was categorized as follows: 5 individuals earned below HK$1,500,000, and 3 individuals earned between HK$1,500,001 and HK$2,000,000[195]. - The Company aims to provide fair market remuneration to attract and retain high-quality staff, adhering to the Corporate Governance Code[197]. - As of June 30, 2020, the Group employed 1,500 full-time equivalent employees, down from 1,900 in 2019[94].
BOSSINI INT'L(00592) - 2020 - 年度财报