Financial Performance - Group revenue for the twelve months ended June 30, 2021, was HK$848 million, a decrease of 22% from HK$1,092 million in 2020[11] - Gross margin improved to 51% in 2021 from 49% in 2020, reflecting a 2 percentage point increase[11] - Loss attributable to owners decreased by 58% to HK$155 million in 2021 from HK$368 million in 2020[11] - Same-store sales declined by 18% in 2021 compared to a 14% decline in 2020[11] - Gross profit fell by 19% to HK$431 million, with a gross margin increase of 2 percentage points to 51%[43] - Loss from operating activities improved by 55% to HK$143 million from HK$319 million[29] - Loss attributable to owners decreased by 58%, with a net margin of negative 18% compared to negative 34% in the previous year[46] - Revenue in Hong Kong and Macau decreased by 31% to HK$491 million (2020: HK$716 million) with same-store sales down 22%[61] - In mainland China, revenue decreased by 8% to HK$271 million (2020: HK$296 million) and same-store sales dropped 12%[66] Cash and Liquidity - Net cash balance increased significantly to HK$373 million in 2021, up 222% from HK$116 million in 2020[11] - Current ratio improved to 2.45 in 2021 from 1.49 in 2020, reflecting a 64% increase in liquidity[5] - Cash and bank balances increased to HK$373 million as of June 30, 2021 (2020: HK$176 million) with a current ratio of 2.45 times[75] Store Operations - The number of directly managed stores in Hong Kong and Macau decreased to 34 from 38, while Mainland China saw a reduction from 154 to 124 stores[6] - The total number of export franchised stores decreased to 708 from 773, indicating a reduction of 65 stores[6] - The Group operated 882 stores as of June 30, down from 982 stores in the previous year[53] - The total net retail floor area in Hong Kong and Macau decreased to 91,000 sq. ft. (2020: 109,500 sq. ft.) and in mainland China to 120,200 sq. ft. (2020: 140,700 sq. ft.)[61][66] Inventory Management - Inventory turnover increased to 136 days in 2021, up from 123 days in 2020[5] - Inventory level at June 30 was HK$155 million, a decrease of 26%[39] - The Group's inventory turnover days increased to 136 days (2020: 123 days) with a return on equity ratio of negative 43% (2020: negative 75%) for the period[77] Strategic Initiatives - The company plans to reposition the Bossini brand from a lower-end fast fashion brand to a street fashion and leisure brand[97] - The Group is focusing on improving operating efficiency by reducing loss-making stores and simplifying work processes to lower operating losses[97] - The company aims to invest significantly in new distribution channels, primarily through opening directly managed and franchised stores in better shopping malls[102] - Collaboration with Viva Technology will enhance the company's e-commerce business and strengthen cooperation with various e-commerce platforms[102] - The next few years are expected to be an investment period for the company, focusing on products and channels, which is the main motive behind the recent rights issue[103] Leadership and Governance - Mr. Cheung has over 25 years of experience in financial management and corporate finance, currently serving as Co-CEO and CFO of Viva China Holdings Limited[111] - Mr. Zhao, appointed in July 2020, has extensive experience in consumer products marketing and distribution in mainland China, leading the consumables business of Viva China[116] - Mr. Chan has over 26 years of experience in auditing and financial management, serving as Executive Director and Director of Finance since August 2010[118] - Mr. Herrero, appointed in July 2020, has extensive corporate management experience in the consumables industry, previously serving as CEO of Guess Inc.[122] - The Company has established various committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, to enhance governance[134] Shareholder Information - As of June 30, 2021, the total number of issued shares of Viva China was 9,541,082,726 shares[149] - Mr. Zhao Jianguo held 288,000,000 ordinary shares and 5,000,000 share options in Viva China, representing approximately 3.07% of the issued share capital[147] - Mr. Cheung Chi held 25,944,000 ordinary shares and 110,000,000 share options in Viva China, representing approximately 1.42% of the issued share capital[147] - Ms. Li Ying, spouse of Mr. Zhao Jianguo, held 700,000,000 share options in Viva China, representing approximately 7.34% of the issued share capital[147] - As of June 30, 2021, Dragon Leap was owned 80% by Viva China, which translates to a significant interest in the shares of the Company[186] Market Conditions - The pandemic continued to adversely affect retail consumption, with tourist arrivals in Hong Kong plunging by 99.6%[55] - The operating environment remains challenging due to the ongoing impact of the COVID-19 pandemic, which may prolong the path to recovery[98]
BOSSINI INT'L(00592) - 2021 - 中期财报