Financial Performance - Revenue for the year ended March 31, 2020, was HK$982,835,000, a decrease of 18.7% compared to HK$1,209,200,000 in 2019[11] - The company reported a net loss of HK$18,164,000, representing a net loss margin of -1.8%, compared to a profit of HK$28,119,000 and a margin of 2.3% in 2019[11] - Earnings per share decreased to -5.4 cents from 8.4 cents in the previous year, reflecting a decline of 164.3%[11] - For the year ended 31 March 2020, sales turnover decreased by 19% to HK$982.8 million, with sales turnover to Europe down 17% to HK$461.6 million, Asia down 39% to HK$169.8 million, and America down 6% to HK$309.9 million[15] - The net loss for the year was HK$18.2 million, a decrease from a profit of HK$28.1 million in the previous year, resulting in a net profit margin drop from 2.3% to -1.8%[25] Profitability and Margins - Gross profit increased by 51.2% to HK$143,802,000, with a gross profit margin of 14.6%, up from 7.9% in the previous year[11] - Gross profit for the year increased by 51% to HK$143.8 million, with gross profit margin rising from 8% to 15% due to changes in customer and product mix, stable raw material costs, and tight cost control measures[17] - Return on equity fell to -1.6%, down from 2.5% in the previous year, a decline of 4.1 percentage points[11] Expenses and Cost Control - Selling and distribution expenses decreased by 23% to HK$18.4 million, representing 1.9% of sales turnover, down from 2.0% the previous year[18] - Administration expenses increased by 1% to HK$104.0 million, rising as a percentage of sales turnover from 8.5% to 10.6%[18] - The Group continues to apply stringent cost control measures across all expenses to mitigate the impact of the challenging business environment[18] Operational Efficiency - Trade receivables turnover days improved to 50 days from 76 days, a reduction of 26 days[11] - Trade payables turnover days improved to 40 days from 46 days, a reduction of 6 days[11] - Inventory turnover days remained stable at 29 days, unchanged from the previous year[11] Impact of COVID-19 - The Group's operations were significantly impacted by the COVID-19 pandemic, leading to order cancellations and delays in product shipments in the first quarter of 2020[15] - The Group's manufacturing facilities resumed operations in phases starting late February 2020 after being shut down due to government orders[15] - The company expects a decrease in sales turnover for the current financial year due to the cautious order placement by customers amid the COVID-19 pandemic[25] Investments and Assets - Total assets as of 31 March 2020 were HK$1,474.8 million, down from HK$1,496.8 million in 2019, while total liabilities decreased from HK$324.5 million to HK$245.6 million[32] - Cash and bank deposits increased to HK$656.8 million from HK$558.6 million in the previous year, with a net cash inflow from operating activities of HK$117.9 million compared to an outflow of HK$602,000 in 2019[32] - The inventory balance decreased from HK$76.2 million to HK$56.3 million, maintaining an inventory turnover of 29 days[32] Shareholder Information - As of March 31, 2020, Mr. Cheung had personal interest in 49,695,335 shares and The Cheung Lun Family Trust had interest in 156,349,960 shares[53] - The company has a significant interest held by The Cheung Lun Family Trust, which indirectly owns 156,349,960 shares[59] - At March 31, 2020, the interests of directors and chief executives in the company's shares totaled 206,045,295, representing approximately 61.43% of the issued share capital[99] Corporate Governance - The company is committed to high standards of corporate governance practices, detailed in the Corporate Governance Report[138] - The Company has complied with most of the code provisions of the Corporate Governance Code, with deviations noted in provisions A.4.1, A.4.2, A.5.1, and A.6.7[151] - The Board consists of four Executive Directors and three Independent Non-Executive Directors, with all Executive Directors attending 100% of the meetings held[173][171] Management and Strategy - The management team includes experienced professionals with over 17 years of experience in various functions, particularly in sales and marketing[63] - The company is led by a diverse management team with expertise in engineering, manufacturing, and logistics[62][63][64] - The company aims to seek growth opportunities through new customers, new product categories, and expansion into mainland China and online sales channels[25] Employee Information - As of 31 March 2020, the group employed approximately 2,500 employees, down from 3,200 in 2019[35] - Performance bonuses for employees are granted on a discretionary basis, based on individual performance and attainment of set targets[35] Tenancy and Rental Agreements - The total rent paid for the year by the group in respect of the tenancy agreements amounts to HK$2,733,100[111][121][122] - The monthly rent for a tenancy agreement with Ardent Investment Limited is HK$123,800, totaling HK$1,485,600 for the year[111] Charitable Contributions - The company made charitable donations amounting to approximately HK$72,000 during the year[138]
亚伦国际(00684) - 2020 - 年度财报