Financial Performance - Revenue for the six months ended September 30, 2019, was HK$3,128,701,000, representing a 2.1% increase from HK$3,062,917,000 in the same period of 2018[14]. - Gross profit for the same period was HK$703,700,000, reflecting a 6.9% increase from HK$658,084,000 year-on-year[14]. - Profit attributable to owners of the Company was HK$141,423,000, up 5.8% from HK$133,722,000 in the previous year[14]. - Earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached HK$441,793,000, a significant increase of 22.4% compared to HK$361,055,000 in 2018[14]. - Earnings per share increased to 11.6 HK cents from 10.9 HK cents year-on-year[14]. - Net profit increased by 5.8% from HK$133.7 million in 1HF2019 to HK$141.4 million in 1HF2020[61]. - Net profit margin improved from 4.4% in 1HF2019 to 4.5% in 1HF2020[61]. Revenue Breakdown - Revenue from bras and intimate wear products amounted to HK$2,580.3 million, representing an 8.7% year-on-year increase and accounting for approximately 82.5% of the Group's overall revenue[25]. - Revenue from bra pads and other moulded products reached HK$345.6 million, accounting for 11.0% of the Group's total revenue, with a gross profit margin of 21.6%[29]. - The functional sports products business contributed HK$202.8 million in revenue, accounting for 6.5% of the Group's total revenue, with a gross profit margin of 19.1%[31]. - Revenue from bras and intimate wear increased by HK$207.4 million, or approximately 8.7%, from HK$2,372.9 million in 1HF2019 to HK$2,580.3 million in 1HF2020, representing 82.5% of total revenue[43]. - Revenue from bra pads and other molded products amounted to HK$345.6 million in 1HF2020, an increase of approximately HK$87.7 million, or 34.0%, compared to HK$258.0 million in 1HF2019, accounting for 11.0% of total revenue[43]. - Revenue from sales of functional sports products decreased to HK$202.8 million in 1HF2020 from HK$432.0 million in 1HF2019, a decline of 53.1%[40]. Cost and Expenses - Cost of sales increased from HK$2,404.8 million in 1HF2019 to HK$2,425.0 million in 1HF2020, with the cost of sales as a percentage of total revenue decreasing from 78.5% to 77.5%[47]. - Distribution and selling expenses increased from HK$72.9 million in 1HF2019 to HK$82.1 million in 1HF2020, representing 2.6% of total revenue in 1HF2020 compared to 2.4% in 1HF2019[55]. - General and administrative expenses increased from HK$303.9 million in 1HF2019 to HK$332.2 million in 1HF2020, representing an increase of 9.5%[57]. - General and administrative expenses as a percentage of total revenue rose from 9.9% in 1HF2019 to 10.6% in 1HF2020[57]. - Finance costs increased from HK$33.5 million in 1HF2019 to HK$65.5 million in 1HF2020, a rise of 95.5%[58]. - Finance costs as a percentage of total revenue increased from 1.1% in 1HF2019 to 2.1% in 1HF2020[58]. Production and Capacity - The Company plans to enhance production scale and efficiency in its Vietnamese factories in the second half of the fiscal year to meet demand from brand partners[17]. - The Group has commenced operations in its Vietnamese Factories D and E, strengthening its production capacity layout in Vietnam[16]. - The Group's production capacity and efficiency in its Vietnamese factories have improved, contributing to continuous enhancements in profit margins[24]. - Production capacity in Vietnam accounted for approximately 65% of total revenue, significantly up from 53% in the same period last year[36]. - The Group's factories in Vietnam and Shenzhen employed approximately 34,000 and 9,500 workers respectively, with skilled workers making up 68% of the workforce in the Vietnam factories[39]. - The Group's production efficiency and profitability have improved due to the maturation of its factories in Vietnam, particularly with the commencement of operations in more automated facilities[38]. Dividends and Shareholder Returns - The interim dividend proposed is HK3.8 cents per share, up from HK3.6 cents in the previous period, aligning with the policy of distributing not less than 30% of net profit as dividends[24]. Taxation and Financial Position - Income tax expense decreased significantly from HK$25.2 million in 1HF2019 to HK$3.5 million in 1HF2020[60]. - The effective tax rate decreased from 23.3% in 1HF2019 to 14.7% in 1HF2020, primarily due to tax holidays for Vietnam subsidiaries[60]. - As of 30 September 2019, the Group's net debt increased to HK$2,762.6 million from HK$2,557.7 million as of 31 March 2019, resulting in a gearing ratio of 94.8% compared to 87.5% previously[63]. - The adjusted net gearing ratio as of 30 September 2019 was 88.6%, compared to 84.6% as of 31 March 2019, after excluding currency depreciation impacts[63]. Future Outlook and Strategy - The Group remains optimistic about future business growth and expansion plans despite global economic concerns[75]. - The management is optimistic about future business growth despite global economic concerns, focusing on production line expansion and efficiency improvements without new facility investments for the next two years[78]. - The Group aims for a balanced customer mix while continuing to develop core intimate wear and functional sports products, leveraging cross-industry competitive advantages[82]. - Increased investment in standardizing craftsmanship and automating production processes is expected to enhance production efficiency and agility[83]. - The management believes that past investments in expanding production capacity in Vietnam will lead to significant profit optimization and long-term value creation for brand partners and shareholders[84]. Accounting and Financial Reporting - The Group adopted HKFRS 16, resulting in lease liabilities recognized at HK$201,122,000 as of April 1, 2019, with a weighted average incremental borrowing rate of 5.2% per annum[123][124]. - The Group's financial information reflects the impact of the adoption of HKFRS 16 without significant changes to its accounting policies[122]. - The Group's leasehold land and land use rights are now grouped as part of right-of-use assets effective from April 1, 2019[127]. - The total segment assets increased due to the accounting policy changes, with specific increases noted in bra pads and functional sports products[133].
维珍妮(02199) - 2020 - 中期财报