PICO FAR EAST(HK:00752)2021-02-09 08:41Financial Performance - Total revenue for the year was HKD 34.38 billion, a decrease of 31.5% compared to HKD 50.17 billion in 2019[28]. - Core operating profit fell to HKD 115.1 million, down 70.4% from HKD 389.5 million in 2019[28]. - Profit attributable to shareholders decreased by 80.3% to HKD 50.5 million, compared to HKD 256.8 million in 2019[28]. - EBITDA decreased by 60.2% to HKD 179.3 million, down from HKD 450.6 million in 2019[28]. - Basic earnings per share dropped to HKD 0.0408, a decline of 80.3% from HKD 0.2076 in 2019[28]. - Proposed final dividend is HKD 0.025 per share, down from HKD 0.135 per share in 2019, representing a decrease of 81.5%[33]. - The group's total revenue from Greater China reached HKD 34.38 billion, accounting for 46.6% of total revenue, down from 53.9% in the previous year[40]. - The exhibition, project, and brand activation segment generated revenue of HKD 24.43 billion, representing 71.0% of total revenue, a decrease from 77.5% in the previous year[42]. - The visual brand activation division reported revenues of HKD 155 million in 2020, down from HKD 255 million in 2019, representing a decline of 39.2%[63][65]. - The visual brand activation division incurred a loss of HKD 9.7 million in 2020, compared to a profit of HKD 23.9 million in 2019[66]. - The division's revenue for the fiscal year 2020 was HKD 797 million, representing a 9.2% increase from HKD 730 million in 2019, and accounted for 23.2% of the group's total revenue[71]. - The division recorded a loss of HKD 82 million in 2020, compared to a profit of HKD 25.4 million in 2019, with revenue dropping from HKD 144 million to HKD 43 million[75]. - The company's revenue for 2020 was HKD 34.38 billion, a decrease from HKD 50.17 billion in 2019, representing a decline of approximately 31.5%[103]. - The profit attributable to shareholders for 2020 was HKD 50.5 million, down from HKD 256.8 million in 2019, indicating a decrease of about 80.4%[103]. - Total assets as of October 31, 2020, were HKD 47.65 billion, compared to HKD 48.98 billion in 2019, reflecting a decrease of approximately 2.7%[104]. - The net equity attributable to shareholders was HKD 19.58 billion in 2020, slightly down from HKD 19.83 billion in 2019, a decrease of about 1.3%[104]. - The operating profit for 2020 was HKD 90.58 million, a significant drop from HKD 377.19 million in 2019, representing a decline of approximately 76%[106]. - The company reported a pre-tax profit of HKD 59.30 million for 2020, down from HKD 318.75 million in 2019, indicating a decrease of about 81.4%[106]. - Total liabilities for 2020 were HKD 26.67 billion, a slight decrease from HKD 27.42 billion in 2019, reflecting a reduction of approximately 2.8%[107]. Impact of COVID-19 - The pandemic has significantly impacted the business, particularly in the exhibition and project activation sectors due to travel restrictions and lockdown measures[32]. - The number of global exhibitions served by the group decreased by 70% due to travel restrictions and quarantine requirements[44]. - The group implemented cost-saving measures and cash reserves to mitigate the impact of COVID-19, which significantly reduced regular operating expenses[38]. - The company has shifted to virtual and digital solutions in response to COVID-19, increasing demand for virtual or hybrid projects[53]. - The company launched a new VX Events platform in the Philippines to adapt to ongoing lockdowns, successfully transitioning several exhibitions to virtual formats[77]. - The company has activated several virtual and hybrid projects, including the HP virtual event and the JD Global Technology Explorer Conference, indicating a shift towards digital solutions[90]. Strategic Initiatives - The company aims to continue investing in sustainable digital infrastructure to drive comprehensive brand activation business growth[2]. - The company is committed to transforming and growing to create and enhance value for customers and shareholders amid challenging conditions[2]. - The group plans to invest in content creation and community engagement to align with consumer trends and enhance brand activation effectiveness[38]. - The company is expected to complete the public transport signage project at Bukit Timah MRT Station in Singapore by 2021[70]. - The company has established a joint venture with Semi Permanent to host design festivals in Asia and the Middle East, enhancing its innovative offerings[77]. - The company is considering strategic acquisitions to enhance its market position, with a budget of $300 million earmarked for potential deals[200]. - The company plans to focus on market expansion and new product development in the upcoming fiscal year[109]. - The company is actively involved in various international organizations, enhancing its global presence and networking opportunities[98]. Governance and Compliance - The board of directors held four meetings and one annual general meeting during the fiscal year ending October 31, 2020, ensuring active governance[111]. - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange regulations[109]. - The company has received annual confirmation letters regarding the independence of all current independent non-executive directors, and it believes they are all independent individuals[114]. - The company’s non-executive directors have a designated term of two years and must stand for re-election at the annual general meeting[117]. - The audit committee, composed of four independent non-executive directors, held three meetings during the fiscal year to discuss financial statements and internal control systems[120]. - The company is committed to providing equal opportunities and regularly reviews its board diversity policy[121]. - The total auditor's remuneration for the year amounted to HKD 4,778,000, a decrease of 28% from HKD 6,625,000 in the previous year[126]. - The company has adopted a dividend policy allowing for two dividends per year, with the board considering factors such as actual and expected financial performance and cash flow needs[133]. - The company is committed to timely disclosure of information to shareholders, with annual general meetings serving as a platform for communication[132]. - The company has established a nomination policy for directors, considering factors such as strategy, skills, and independence[124]. Assets and Liabilities - The group's total tangible assets increased by 2.9% to approximately HKD 1.399 billion as of the fiscal year-end, compared to HKD 1.360 billion in 2019[79]. - Cash and bank balances stood at HKD 1.304 billion, up from HKD 1.294 billion in 2019, while net cash balance after deducting borrowings was HKD 638 million, down from HKD 682 million[80]. - Total borrowings increased to HKD 666 million in 2020 from HKD 612 million in 2019, with long-term borrowings at HKD 394 million, up from HKD 354 million[81]. - Employee costs for the year amounted to approximately HKD 844 million, a decrease from HKD 960 million in 2019[82]. - The debt ratio for 2020 stands at 11.47%, a significant increase from 7.23% in 2019, reflecting higher leverage[84]. Market and Customer Insights - The company anticipates significant opportunities in 2021 driven by the recovery of the Chinese economy[89]. - Customer satisfaction ratings improved to 85%, reflecting a 5% increase from the previous quarter[200]. - The company is investing in new technology development, allocating $50 million towards R&D initiatives[200]. - Market expansion efforts are underway, with plans to enter three new international markets by the end of the year[200]. Risk Management - The board is responsible for the effectiveness of risk management and internal control systems, with a dedicated risk management committee in place[128]. - Key audit matters identified include impairment of trade receivables and contract assets, revenue from construction contracts, and impairment assessments of goodwill and other intangible assets[191]. - The company has maintained sufficient public float as required by listing rules throughout the year[185]. Environmental Commitment - The company is committed to promoting environmental sustainability and complying with applicable environmental laws and regulations[180].