PICO FAR EAST(HK:00752)2020-02-13 08:32Financial Performance - Total revenue for the year reached HKD 50.17 billion, an increase of 8.3% compared to HKD 46.31 billion in 2018[32]. - Core operating profit rose to HKD 3.895 billion, reflecting a growth of 6.4% from HKD 3.661 billion in the previous year[34]. - Net profit attributable to shareholders decreased by 5.4% to HKD 2.568 billion, down from HKD 2.715 billion in 2018[36]. - EBITDA increased by 2.8% to HKD 4.506 billion, compared to HKD 4.383 billion in 2018[37]. - Basic earnings per share were HKD 0.2076, a decline of 5.7% from HKD 0.2201 in the previous year[38]. - The group's total revenue from the Greater China region reached HKD 50.17 billion, accounting for 53.9% of total revenue, a decrease from 59.1% in the previous year[56]. - Revenue from the exhibition and project marketing services segment was HKD 38.88 billion, representing 77.5% of total revenue, with a profit of HKD 3.205 billion, down from HKD 3.281 billion the previous year[57]. - The revenue for the visual branding division was HKD 255 million in 2019, down from HKD 368 million in 2018, representing a decrease of 30.7%[70]. - The profit for the visual branding division was HKD 23.9 million in 2019, compared to HKD 42.8 million in 2018, a decline of 44.3%[71]. - The revenue for the museum and themed environment division increased to HKD 730 million in 2019 from HKD 359 million in 2018, marking a growth of 103.1%[77]. - The profit for the museum and themed environment division rose to HKD 71.5 million in 2019, up from HKD 30.5 million in 2018, an increase of 134.4%[77]. - The revenue from the event management segment was HKD 144 million in 2019, up from HKD 86 million in 2018, representing a growth of 67.4%[82]. - The profit from the event management segment increased to HKD 25.4 million in 2019, compared to HKD 20.1 million in 2018, marking a growth of 26.2%[82]. Acquisitions and Expansion - The company successfully acquired Local Projects, LLC in March 2019, enhancing its marketing capabilities[51]. - In June 2019, the acquisition of Infinity Marketing Team, LLC was completed, expanding the company's service offerings in experiential marketing[51]. - The acquisition of Not Ordinary Media, LLC (NOM) underperformed expectations, leading to a revision of cash flow forecasts for this cash-generating unit due to customer base restructuring and impairment losses on goodwill[52]. - The company has ongoing contracts for theme parks in Chongqing and Wuxi, continuing its expansion in the Chinese market[79]. - The group secured several contracts for the upcoming 2020 Dubai Expo, including the design and content development for multiple national pavilions[100]. - The group won a significant venue facilities contract for the Tokyo 2020 Olympics, providing technical design and construction services for the archery venue[101]. - The company is expanding its operations in Southeast Asia and India, with a focus on enhancing its digital capabilities[107]. - The company has established a visual branding experience division, with contracts for major restaurant brands and logistics platforms in China, indicating a strategic expansion in the domestic market[102]. Financial Position and Liquidity - The company maintained a current ratio of 1.44, slightly up from 1.42 in 2018, indicating improved liquidity[43]. - Total tangible assets decreased by 16.0% to approximately HKD 1.36 billion in 2019, down from HKD 1.62 billion in 2018[88]. - Cash and bank balances increased to HKD 1.29 billion in 2019 from HKD 871 million in 2018, representing a growth of 48.0%[90]. - Total borrowings rose significantly to HKD 612 million in 2019 from HKD 109 million in 2018, indicating a substantial increase in leverage[89]. - The debt ratio increased to 7.23% in 2019 from 0.39% in 2018, indicating a higher proportion of debt in the capital structure[92]. - The group reported total assets pledged as collateral for bank financing amounting to HKD 188,887 thousand, a slight decrease from HKD 194,114 thousand in the previous year[97]. - The company’s distributable reserves amount to HKD 840,073,000, a decrease from HKD 872,757,000 in the previous year[151]. Corporate Governance - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange regulations for the fiscal year ending October 31, 2019[120]. - The board consists of four independent non-executive directors, ensuring a balance of power within the company's management structure[120]. - The company has adopted the standard code of conduct for securities transactions by directors, confirming compliance for the fiscal year ending October 31, 2019[121]. - The board is responsible for monitoring the company's business and governance policies, ensuring compliance with legal and regulatory requirements[122]. - The company has established a formal and transparent process for determining and monitoring the remuneration of directors and senior management[130]. - The company emphasizes timely disclosure of information to shareholders, with reports and announcements available on its website[143]. - The company has established a nomination policy for board members, considering factors such as company strategy and required skills for board composition[136]. - The company has a stock option plan approved on March 22, 2012, which allows the granting of options to eligible persons for a period of ten years[165]. - The company has not engaged in any related party transactions that require disclosure under the Listing Rules during the year[187]. - The company has maintained compliance with all relevant laws and regulations without any significant violations during the year[192]. Employee and Management - The company employed approximately 2,500 full-time staff globally, with a gender ratio close to 50:50 and over 70% of employees under the age of 40, highlighting the importance of attracting young talent for future growth[53]. - The group reported employee costs of approximately HKD 960 million for the year, an increase from HKD 865 million in the previous year, reflecting a growth of about 11%[99]. - The employee compensation policy is determined by the remuneration committee based on performance, qualifications, and market statistics[186]. - The management team is focused on leveraging data technology and innovative business models to enhance operational efficiency[107]. Future Outlook - The group is optimistic about growth in the 2020 fiscal year despite global economic uncertainties, focusing on delivering major projects and enhancing service innovation[103]. - The group anticipates greater contributions from acquisitions made in the US and UK over the past two years, starting in the 2020 fiscal year[103]. - The group continues to enhance its conference and exhibition management capabilities, with key projects planned for 2020 in Abu Dhabi and Singapore[103].