FAIRWOOD HOLD(HK:00052)2021-07-29 09:03Revenue and Profit Performance - Revenue decreased by 12.7% to HK$2,646.5 million for the year, down from HK$3,030.2 million in 2020 due to the adverse effects of the COVID-19 pandemic on economic activities and restaurant patronage [9]. - Profit for the year increased by 152.4% to HK$153.6 million, compared to HK$60.9 million in 2020, primarily due to improved productivity, efficiency, and various subsidies from the Hong Kong Government [10]. - Basic earnings per share rose by 152.2% to HK$118.59 cents, up from HK$47.03 cents in 2020 [12]. - Profit attributable to equity shareholders rose by 152.4% to HK$153.6 million (2020: HK$60.9 million) [48]. - Basic earnings per share amounted to HK118.59 cents (2020: HK47.03 cents) [48]. Financial Position and Dividends - The Group maintained a healthy financial position with bank deposits, cash, and cash equivalents of HK$622.1 million as of March 31, 2021, with no bank borrowings and a nil gearing ratio [12]. - A proposed final dividend of HK$60.0 cents per share was announced, with a total dividend per share for the year of HK$90.0 cents and a payout ratio of approximately 76% [12]. - The total equity of the Group increased to HK$777.8 million from HK$720.8 million in 2020 [98]. - The total reserves available for distribution to equity shareholders as of 31 March 2021 amounted to HK$356,068,000, down from HK$459,419,000 in 2020 [162]. - The Company reported a final dividend of HK$60.0 cents per share for the year ended 31 March 2021, an increase from HK$50.0 cents in 2020 [159]. Impact of COVID-19 - The pandemic led to significant challenges in the restaurant industry, with a notable decline in dine-in patronage, but takeaway sales increased significantly [54]. - Same-store sales in Hong Kong decreased by approximately 15% due to the pandemic, while in Mainland China, the decline was about 27% in local currency [75][79]. - Various government subsidies helped stabilize the Group's performance despite the decline in sales [58]. - Fairwood expanded its takeaway sales and introduced a new "Click and Collect" platform to mitigate the drop in dine-in sales [75][77]. - The Group maintained a focus on health, hygiene, and safety for staff and customers throughout the pandemic [62]. Operational Developments - The "Click and Collect" online ordering system was rapidly adopted and contributed significantly to the Group's total sales [64]. - New menu items, including clay pot rice dishes and a Golden Cheesy Baked Rice series, were introduced to cater to changing consumer preferences during the pandemic [67]. - The company opened a total of 9 new stores during the year, including 5 in Hong Kong and 4 in Mainland China, bringing the total to 156 stores in Hong Kong and 16 in Mainland China [79][80]. - The company completed the localization of its Mainland China management team to enhance local expertise for better decision-making regarding new store locations [79]. - Plans are in place to expand the menu options to appeal to a wider range of age groups, with increased use of technology for menu selection and ordering [85]. Financial Management and Cost Control - The Group maintained a nil gearing ratio as there were no bank loans as of March 31, 2021 [99]. - The average return on equity rose to 20.5% in 2021, up from 8.1% in 2020 [102]. - The Group's net current liabilities improved to HK$9.6 million from HK$247.0 million in 2020, with a current ratio of 1.0 compared to 0.7 in the previous year [96]. - The company remains committed to cost controls and prudent financial management as part of its strategy moving forward [85]. - Capital expenditures for the year were approximately HK$93.5 million, down from HK$143.6 million in 2020 due to fewer new store openings and renovations [103]. Governance and Compliance - The company is committed to supporting environmental protection and complying with relevant regulations [146]. - The board of directors includes members with extensive experience in finance, management, and human resources [140][142]. - The company has a strong governance structure with various committees overseeing audit and remuneration [138][144]. - The Board was not aware of any non-compliance with applicable laws and regulations that could significantly impact the Group as of the report date [157]. - The Group's operating principles regarding environmental, social, and governance matters will be discussed in the upcoming report [149]. Employee Management - The Group continues to offer competitive remuneration packages and has committed to training programs to enhance employee skills and competencies [122]. - The Group's employee costs are reviewed annually based on performance, with a focus on maintaining competitive compensation [121]. - The Group's total employee count as of March 31, 2021, was approximately 5,600, down from 5,800 in 2020, with staff costs amounting to HK$734.3 million, a decrease of 27.9% from HK$1,019.9 million in 2020 [121]. - Directors and employees of the Group had interests in options to subscribe for shares of the Company granted for HK$1 consideration under the Share Option Scheme [197]. - The Company aims to attract and retain quality personnel through the Share Option Scheme, aligning the interests of option holders with shareholders [196].