叙福楼集团(01978) - 2020 - 年度财报

Chairman's Statement The Chairman's statement reviews the challenging year 2020, highlighting the Group's resilience, multi-brand strategy, and full-year profitability despite the pandemic, while expressing optimism for 2021's market recovery - Despite severe business impact in 2020 due to the pandemic and social distancing measures, the Group gained customer trust through effective prevention measures and showed strong recovery in months with eased restrictions, ultimately achieving full-year profitability[9] - The Group maintained its multi-brand strategy, adjusted its store portfolio during the year, successfully opened its second "Gyu-Kaku Buffet," and plans to continue opening new stores and introducing emerging F&B concepts[11] - Looking ahead to 2021, the local consumer market is expected to recover rapidly, driven by controlled epidemic, vaccine rollout, and government e-consumption vouchers, presenting growth opportunities for the Group[12] Proposed Final Dividend | Dividend Type | Amount (per share) | | :--- | :--- | | Proposed Final Dividend | 13.16 HK cents | Management Discussion and Analysis This section provides an overview of the Group's business operations, financial performance, liquidity, human resources, and future prospects Business Review The Group operates 38 full-service, multi-brand restaurants in Hong Kong, specializing in Asian and Cantonese cuisine, serving diverse market segments Restaurant Portfolio | Restaurant Type | 2020 Number | 2019 Number | | :--- | :--- | :--- | | Cantonese Restaurants | | | | — Proprietary Brands | 1 | 2 | | Asian Restaurants | | | | — Proprietary Brands | 13 | 14 | | — Franchised Brands | 24 | 22 | | Total | 38 | 38 | Financial Review The Group's 2020 revenue declined by 20.2% to HKD 803 million due to the pandemic, but one-off government subsidies and lease gains led to a significant turnaround to HKD 140 million profit Key Financial Metrics | Financial Metric | 2020 (HKD million) | 2019 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 802.9 | 1,005.8 | -20.2% | | Profit/(Loss) for the Year | 140.3 | (11.3) | Turnaround to Profit | | Core Profit Before Tax | 27.3 | 64.0 | -57.3% | - Monthly revenue charts for comparable restaurants show the most significant declines during the strictest social distancing months (e.g., July, August, December) and strong sales recovery when measures eased (e.g., May, June, October)[46][48] - Other income and gains increased over 20 times, primarily from one-off government subsidies of approximately HKD 43.8 million and net gains from lease modifications of approximately HKD 46 million[49] - Staff costs decreased by 29.1% year-on-year, mainly due to government "Employment Support Scheme" wage subsidies of approximately HKD 43.1 million and reduced salaries from the disposal of some Cantonese restaurants[51] Liquidity and Financial Resources The Group maintains a robust financial position, relying on internal cash flow and IPO proceeds, with ample cash, an improved current ratio of 1.8x, and no interest-bearing debt Liquidity Indicators | Metric | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Short-term Bank Deposits | HKD 159.6 million | HKD 132.4 million | | Cash and Cash Equivalents | HKD 179.1 million | HKD 130.8 million | | Current Ratio | Approx. 1.8x | Approx. 1.1x | | Debt-to-Equity Ratio | Not Applicable | Not Applicable | Employees and Remuneration Policy The Group's employee count increased to 1,344 by year-end 2020, with remuneration based on market levels and performance, and no share options granted during the year - As of December 31, 2020, the Group had 1,344 employees, an increase from 930 in 2019[61] - The company has a share option scheme, but no share options were granted or remained unexercised during the year ended December 31, 2020[61] Prospects Management is cautiously optimistic about 2021, expecting rapid market recovery driven by pandemic control and government initiatives, while planning to expand online services and introduce new restaurant concepts - Management expects the local consumer market to recover rapidly, presenting opportunities for the Group, driven by a stable pandemic situation in Hong Kong, widespread vaccination, and government e-consumption vouchers[66] - Future strategies include: - Enhancing food delivery and takeaway services, expanding online business - Strengthening online and digital system management to improve efficiency - Timely adjusting store and brand portfolio, developing more promising brands - Planning to launch new concept hotpot restaurants and all-day casual dining restaurants in the local market[67] Biographies of Directors and Senior Management This section provides detailed biographies of the executive directors, independent non-executive directors, and senior management, highlighting their roles and contributions to the Group's governance and operations - Mr. Wong Kit Lung, Chairman and Chief Executive Officer, is responsible for the Group's overall management, strategic planning, and business development, and holds various public positions in Hong Kong[70][71] - Ms. Ko Sau Chi, Vice Chairman, is primarily responsible for strategic planning, business development, procurement, and human resources management[73] - The independent non-executive director team comprises Mr. Sin Yat Kin, Ms. Hung Lo Shan, and Mr. Hung Wai Man, who possess deep backgrounds in public disciplinary services, accounting and taxation, and information technology, respectively[75][76][80] Directors' Report This report outlines the Group's business activities, key risks, financial results, dividend policy, use of IPO proceeds, and interests of directors and major shareholders Business Review and Principal Risks The report outlines the Group's restaurant operations in Hong Kong and identifies key business risks, including site selection, growth strategy, licensing, brand reputation, food safety, and human resources - Principal business risks faced by the Group include: - Limited restaurant site selection, failure to renew leases, or rent increases - Inability to effectively implement growth strategies - Uncertainty in obtaining or renewing operating licenses - Volatile impact of new restaurants on financial performance - Damage to brand reputation - Food and service quality incidents - Fluctuations in food ingredient supply, quality, or cost - Difficulties in recruiting and retaining employees[90] Results and Dividends The Board recommends a final dividend of 13.16 HK cents per share, totaling HKD 105 million, representing approximately 75% of profit attributable to shareholders Dividend Information | Item | Amount/Ratio | | :--- | :--- | | Proposed Final Dividend | 13.16 HK cents per share | | Total Proposed Dividend | HKD 105,280,000 | | Dividend Policy Target | Not less than 50% of profit attributable to shareholders | | Proposed Payout Ratio for the Year | Approx. 75% | Use of Net Proceeds from Listing As of April 26, 2021, approximately HKD 98.13 million (54.9%) of the HKD 179 million IPO net proceeds have been used for new restaurant openings IPO Proceeds Utilization | Item | Amount (HKD thousand) | | :--- | :--- | | Net Proceeds from IPO | 178,610 | | Utilized Proceeds as of Latest Practicable Date | 98,131 | | Unutilized Proceeds as of Latest Practicable Date | 80,479 | | Percentage of Utilized Proceeds | Approx. 54.9% | Major Customers and Suppliers The Group has a diversified customer base, but supplier concentration is higher, with the largest supplier accounting for 24.8% of total purchases - The largest supplier accounted for 24.8% of total purchases, and the top five suppliers collectively accounted for 54.4%[116] Directors' and Chief Executives' Interests in Shares This section discloses the interests of directors and major shareholders, with executive directors Mr. Wong Kit Lung and Ms. Ko Sau Chi, through Fulum Group Holdings Limited, collectively holding 75% of the company's shares Directors' Shareholding | Director Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wong Kit Lung | Interest in controlled corporation, etc. | 600,000,000 | 75% | | Ms. Ko Sau Chi | Interest in controlled corporation, etc. | 600,000,000 | 75% | - Controlling shareholder Fulum Group Holdings Limited beneficially owns 600,000,000 shares, representing 75% of the company's total share capital[142] Share Option Scheme The company adopted a ten-year share option scheme in May 2018 to incentivize talent, but no options were granted or remained unexercised during the reporting period - No share options have been granted under the share option scheme since its adoption. As of December 31, 2020, there were no unexercised share options[153] Corporate Governance Report This report details the Group's corporate governance practices, board structure, committee functions, auditor's remuneration, and risk management and internal control systems Corporate Governance Practices The Group maintained high corporate governance standards, complying with all code provisions except for the combined Chairman and CEO roles, which the Board deems beneficial - During the reporting period, the company deviated from Corporate Governance Code provision A.2.1, where the roles of Chairman and Chief Executive Officer are held by the same person, Mr. Wong Kit Lung, an arrangement the Board considers beneficial with balanced power[160][170] Board and Committees The Board, comprising two executive and three independent non-executive directors, oversees company affairs through its Nomination, Remuneration, and Audit Committees, ensuring effective corporate governance Board Committees and Responsibilities | Committee | Chairman | Primary Responsibilities | | :--- | :--- | :--- | | Nomination Committee | Mr. Wong Kit Lung | Reviews Board structure, size, composition, and diversity, and makes recommendations on director appointments | | Remuneration Committee | Mr. Sin Yat Kin | Advises the Board on remuneration policies and structures for directors and senior management | | Audit Committee | Ms. Hung Lo Shan | Assists the Board in overseeing the effectiveness of financial reporting processes, internal controls, and risk management systems | - All Board members maintained excellent meeting attendance records during the reporting year, with 100% attendance at all regular Board meetings[169] Auditor's Remuneration Total fees paid to the auditor, PricewaterhouseCoopers, amounted to HKD 3.032 million, covering both audit and non-audit services Auditor Fees | Service Type | Fees (HKD thousand) | | :--- | :--- | | Audit Services | 2,100 | | Non-Audit Services | 932 | | Total | 3,032 | Risk Management and Internal Control The Board is responsible for the Group's risk management and internal control systems, which are deemed effective, with the Board directly overseeing internal audit functions - The Board is solely responsible for the Group's risk management and internal control systems, which it considers adequately effective during the reporting year[206][208] - The company has no internal audit function, with related responsibilities directly performed by the Board[208] Environmental, Social and Governance Report This report details the Group's commitment to environmental protection, responsible employment practices, ethical operations, and community investment initiatives Environmental Matters The Group is committed to environmental protection through energy-saving, waste reduction, and eco-friendly dining initiatives, with detailed disclosures on key environmental performance indicators Energy and Resource Consumption | Energy/Resource Consumption | Unit | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Gas Fuel Consumption | kg | 4,563,365 | 4,761,685 | | Electricity Consumption | kWh | 8,460,002 | 9,956,427 | | Water Consumption | cubic meters | 230,590 | 286,829 | - The Group implemented various waste reduction measures, including no longer proactively providing plastic straws, charging for disposable cutlery, and offering discounts to customers who bring their own takeaway containers to encourage eco-friendly consumption habits[263][264] - The Group promotes eco-friendly dining, collaborating with GreenMonday to offer vegetarian options and including sustainable seafood on its menus, in response to the "Say No to Shark Fin" policy[270][272] - During the reporting year, the Group collected and recycled 8,315 liters of waste cooking oil for conversion into industrial products such as biodiesel[274] Social — Employment and Labor Practices The Group fosters a caring culture, offering diverse benefits, extensive training, and performance incentives, while prioritizing employee physical and mental well-being, diversity, and inclusion Employee Statistics (End of 2020) | Employee Statistics (End of 2020) | Data | | :--- | :--- | | Total Number | 1,344 employees | | Gender Distribution | Male 51%, Female 49% | | Employment Type | Full-time 58%, Part-time 42% | | Age Distribution | Under 25 years old accounts for 30% as the largest group | - The Group provides benefits exceeding statutory requirements, including 5 days of full-pay paternity leave, paid birthday leave, and volunteer leave[283][284][285] - In response to the pandemic, the Group provided employees with anti-epidemic supplies and required participation in online infection prevention courses, while also addressing employee mental health by signing the "Happy@Healthy Workplace" charter[312][316] - During the reporting year, the Group provided 3,494 hours of employee training and established an online Learning Management System (LMS)[306] Social — Operating Practices The Group prioritizes supply chain management, customer experience through digital innovation, and strict adherence to food safety regulations, while maintaining a zero-tolerance policy on corruption - The Group collaborates with approximately 255 Hong Kong-based suppliers and conducts annual assessments of key suppliers to ensure product quality and social responsibility[320][322] - Customer dining experience and convenience are enhanced through innovations such as the launch of the "Kabu App" and the introduction of robot staff "Niku"[324][325] - The Group has a Quality and Safety Department ensuring compliance with ISO 9001 and ISO 22000 standards, and tracks food sources to guarantee food safety[335][336] - The Group maintains a zero-tolerance stance on corruption and has established whistleblowing procedures to uphold corporate integrity[341] Social — Community Investment The Group actively engages in social responsibility, implementing early anti-epidemic measures and continuously participating in charitable activities, with total donations of HKD 0.381 million - Before regulatory requirements, the Group proactively implemented anti-epidemic measures in restaurants, such as installing partitions, designating "table sanitizers," and ensuring hourly air changes, earning "Hygiene Anti-Epidemic Measures Certification" from the Hong Kong Quality Assurance Agency[344] Charitable Donations | Item | 2020 | 2019 | | :--- | :--- | :--- | | Charitable Donations (HKD) | 381,000 | 438,000 | Independent Auditor's Report PricewaterhouseCoopers issued an unqualified opinion on the Group's consolidated financial statements, highlighting the impairment assessment of underperforming restaurant outlets as a key audit matter - The auditor believes the consolidated financial statements fairly and truly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, issuing an unqualified opinion[417] - A key audit matter is the "Impairment assessment of your Group's underperforming restaurant outlets," which the auditor focused on due to the significant estimates and judgments required from management in forecasting revenue growth, operating costs, and discount rates[429][430] Consolidated Financial Statements This section presents the Group's consolidated financial statements, including the statement of comprehensive income, financial position, cash flows, and a five-year financial summary Consolidated Statement of Comprehensive Income This statement shows the Group's 2020 operating results, with revenue of HKD 803 million and a significant turnaround to HKD 140 million profit for the year Consolidated Statement of Comprehensive Income Summary | Item (HKD thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 802,852 | 1,005,776 | | Profit/(Loss) Before Tax | 143,747 | (948) | | Total Profit/(Loss) for the Year | 140,328 | (11,268) | | Basic Earnings/(Loss) Per Share (HK cents) | 17.54 | (1.40) | Consolidated Statement of Financial Position This statement reflects the Group's financial position as of December 31, 2020, showing total assets of HKD 747 million, total liabilities of HKD 333 million, and total equity of HKD 415 million Consolidated Statement of Financial Position Summary | Item (HKD thousand) | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | 747,497 | 742,215 | | Total Liabilities | 332,896 | 467,942 | | Total Equity | 414,601 | 274,273 | Consolidated Statement of Cash Flows This statement summarizes cash flows, showing HKD 178 million net cash inflow from operations, net outflows from investing and financing, and a net increase of HKD 48.39 million in cash and cash equivalents Consolidated Statement of Cash Flows Summary | Item (HKD thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 178,094 | 244,972 | | Net Cash Flows Used in Investing Activities | (42,828) | (33,639) | | Net Cash Flows Used in Financing Activities | (86,877) | (222,863) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 48,389 | (11,530) | Financial Summary This summary presents key financial data for the past five fiscal years, showing a strong profit rebound in 2020 and resumed equity growth after a 2019 loss Five-Year Financial Summary | As at December 31 (HKD thousand) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 802,852 | 1,005,776 | 1,004,105 | 829,152 | 743,046 | | Profit/(Loss) for the Year | 140,328 | (11,268) | 35,160 | 23,997 | 40,551 | | Total Assets | 747,497 | 742,215 | 573,757 | 346,959 | 428,867 | | Total Liabilities | (332,896) | (467,942) | (163,211) | (145,457) | (169,152) |