佐丹奴国际(00709) - 2019 - 中期财报

Financial Performance - Group sales for the six months ended June 30, 2019, were HK$2,542 million, a decrease of 11% compared to HK$2,860 million in 2018[4] - Operating profit for the same period was HK$259 million, down 26% from HK$348 million in 2018[4] - Profit attributable to shareholders decreased by 36.6% to HK$161 million, compared to HK$254 million in 2018[4] - The gross margin for the group was 59.3%, with comparable store gross profit down by 8.9% and comparable store sales down by 8.6%[5] - Group sales decreased by 11.1% to HK$2,542 million, with a 9.1% decline at constant exchange rates[12] - Sales in the Greater China region dropped by 17.3%, significantly impacting overall performance[12] - E-business revenue was HK$132 million, down 19.0%, accounting for 5.2% of total sales[13] - Physical store sales recorded an 8.9% decline, while wholesale sales to franchisees fell by 20.8%[14] - Gross profit decreased by 11.0% to HK$1,508 million (2018: HK$1,694 million), primarily due to a volume decrease of 9.3%, despite an increase in average selling price and a decrease in average product cost[17] - Profit after income taxes attributable to shareholders decreased by 36.6% to HK$161 million (2018: HK$254 million), with a net margin of 6.3%[28] - Total sales for the six months ended June 30, 2019, were HK$1,297 million, down 14.3% from HK$1,513 million in 2018[37] - Operating profit for the same period was HK$54 million, a significant decrease of 61.2% compared to HK$139 million in 2018[35] - Total sales for the six months ended June 30, 2019, were HK$343 million, representing a 2.1% increase from HK$336 million in 2018[41] - Gross profit increased by 8.3% to HK$222 million, with a gross margin of 64.7%[41] - Operating profit rose by 36.0% to HK$68 million, with an operating margin of 19.8%[41] - The Group's total inter-segment sales were HK$599 million, down from HK$641 million in 2018, reflecting a decrease of approximately 6.6%[116] - The profit attributable to shareholders for the six months ended June 30, 2019, was HK$161 million, a decrease of 36.5% compared to HK$254 million in 2018[124] Store Operations - The total number of stores decreased by 20 to 2,424 as of June 30, 2019[6] - The number of franchised stores in Mainland China increased to 636 from 612 in 2018, while directly operated stores decreased to 281 from 326[7] - The total number of stores at the end of the period was 1,196, a decrease of 24 stores from 1,220 in 2018[37] - Total stores across all markets decreased from 434 to 427, with Southeast Asia showing a slight increase in store count from 225 to 228[47] - The number of stores in South Korea decreased from 191 to 179, reflecting a reduction of 12 stores[45] Cash and Liquidity - Cash and bank balances, net of bank loans, were HK$1,026 million as of June 30, 2019[5] - The net cash and bank balances at period end were HK$1,026 million, a decrease of 16.2%[12] - Cash generated from operations increased to HK$616 million in 2019, up from HK$486 million in 2018, reflecting a growth of 26.8%[68] - Cash and cash equivalents at the end of the period were HK$1,265 million, slightly down from HK$1,249 million in 2018[70] - Cash and cash equivalents increased to HK$1,265 million as of June 30, 2019, compared to HK$1,142 million as of December 31, 2018, representing an increase of 10.8%[144] - Current ratio decreased to 1.5 based on current assets of HK$2,264 million and current liabilities of HK$1,486 million (2018: 2.4)[48] Inventory Management - Inventory turnover days increased to 92 days from 77 days in 2018[4] - Inventory at period end was HK$526 million, with an inventory turnover of 92 days[12] - Group inventories increased by HK$27 million, or 5.4%, to HK$526 million (June 30, 2018: HK$499 million), primarily consisting of winter stock[49] - Management will closely monitor inventory levels to avoid an inventory glut, which could negatively impact future gross profit[49] Dividends and Shareholder Returns - The interim dividend per share was HK 10.2 cents, a decrease of 40% from HK 17.0 cents in 2018[4] - Proposed dividends for the period were HK$161 million, down from HK$260 million in the previous year, a decrease of 38.0%[64] - The company aims to return surplus cash to shareholders through dividends and share repurchase, aligning with its dividend policy[169] - The interim dividend is payable on September 20, 2019, to shareholders listed on the register as of September 12, 2019[169] Market Performance - Sales in the Greater China region dropped by 17.3%, significantly impacting overall performance[12] - Sales in Mainland China accounted for 20.8% of total sales but only contributed 1.1% to operating profit, highlighting challenges in profitability[23] - The Greater China region experienced a comparable store sales (CSS) decrease of 12.6% due to the Sino-US trade dispute, impacting domestic retail[34] - Sales to external customers in Hong Kong and Macau were HK$561 million, down from HK$651 million in 2018, a decrease of approximately 13.9%[116] Financial Position - Total assets as of June 30, 2019, increased to HK$5,100 million, compared to HK$4,124 million at the end of 2018[64] - Current liabilities increased to HK$1,486 million, up from HK$992 million at the end of 2018, indicating a rise of 49.8%[64] - Non-current liabilities rose to HK$706 million, compared to HK$123 million at the end of 2018, reflecting a significant increase[64] - As of June 30, 2019, total equity attributable to shareholders of the Company was HK$2,908 million, a decrease from HK$3,000 million at December 31, 2018[65] Accounting and Compliance - The Group adopted HKFRS 16 Leases effective January 1, 2019, resulting in changes to accounting policies and adjustments to unaudited interim results[81] - The Group's principal accounting policies were updated to reflect the changes in lease accounting, affecting both the balance sheet and income statement[89] - The unaudited condensed consolidated interim financial information for the six months ended June 30, 2019, was reviewed by PricewaterhouseCoopers[191] - The Audit Committee has discussed auditing, risk management, and internal control systems regarding the interim results for the six months ended June 30, 2019[192] Corporate Governance - The company has complied with all applicable code provisions under the Corporate Governance Code, with some deviations noted[186] - The company believes that stability and continuity in the role of the Chairman are beneficial for successful business plan implementation[186] - The company has a strong corporate governance structure in place to ensure effective oversight of management[186] Employee and Management Information - The Group had approximately 7,900 employees as of June 30, 2019, down from 8,200 employees on December 31, 2018[55] - The company reported an annual director's fee of HK$420,000 for Dr. Barry John Buttifant, effective from April 1, 2019[187] - Dr. Chan Ka Wai's annual salary is set at HK$2,343,162, effective from April 1, 2019[187] Share Options and Equity - A total of 2,724,000 share options were outstanding as of June 30, 2019, under the 2002 and 2011 Share Option Schemes[181] - The total number of share options granted during the period is 148,940,000[184] - The total number of share options exercised during the period is 1,996,000[184] - The total number of share options lapsed during the period is 210,000[184] - The total number of share options cancelled during the period is 146,734,000[184] Sustainability and Corporate Responsibility - The company emphasizes its commitment to sustainability by printing its interim report on environmentally friendly paper[195]