Financial Performance - The Group's total revenue for the year ended 31 March 2019 was approximately HK$458.2 million, representing a decrease of approximately 43.1% compared to the previous year[9]. - Profit attributable to owners of the Company for the Review Year was approximately HK$9.8 million, a decrease of approximately 80.7% compared to the previous year[9]. - The Group's revenue decreased by approximately HK$347.5 million, or approximately 43.1%, from approximately HK$805.7 million to approximately HK$458.2 million compared to the previous fiscal year[35]. - Gross profit decreased by approximately HK$64.7 million or approximately 66.6%, from approximately HK$97.1 million to approximately HK$32.4 million, with a gross profit margin of approximately 7.1% compared to 12.1% in the previous year[38]. - Other gains decreased significantly to approximately HK$84,000 from approximately HK$2.1 million, primarily due to a one-off bank interest income in the previous year and an exchange loss of approximately HK$1.0 million[39]. - Administrative expenses decreased by approximately HK$15.1 million or approximately 43.3%, from approximately HK$34.9 million to approximately HK$19.8 million[45]. - Income tax expense decreased by approximately HK$10.6 million or approximately 80.9%, from approximately HK$13.1 million to approximately HK$2.5 million[47]. - Net profit decreased by approximately HK$41.2 million or approximately 80.8%, from approximately HK$51.0 million to approximately HK$9.8 million, resulting in a net profit margin of approximately 2.1% compared to 6.3% in the previous year[48]. Industry Overview - The construction industry in Hong Kong experienced a slight year-on-year growth of only 0.9% in gross value of construction works performed by main contractors[8]. - The number of construction sites in Hong Kong increased by 3.5% year-on-year, totaling 1,489 sites as of 31 December 2018[8]. - Employment at construction sites fell by 16.1% compared to the previous year, indicating a severe labor shortage[8]. - The foundation industry in Hong Kong is facing challenges due to increased costs and competition, necessitating a focus on improving operational performance[15]. - The demand for construction materials in Hong Kong is increasing, driven by ongoing and planned infrastructure projects[22]. Strategic Initiatives - The Group aims to leverage its competitive strengths, including its established reputation, technology and machinery capabilities, long-term customer relationships, and experienced management team[10]. - The Group is considering expanding its geographical coverage beyond the Hong Kong market to enhance future development and strengthen revenue bases[16]. - The Group aims to diversify its business to provide better returns to shareholders[16]. - The Group's management remains cautiously optimistic about the foundation industry's future despite existing challenges[24]. Financial Ratios and Position - The current ratio increased from approximately 6.4 times to approximately 7.2 times as at 31 March 2019[54]. - The gearing ratio increased from approximately 1.7% to approximately 2.0% as at 31 March 2019, primarily due to an increase in bank borrowings[54]. - Return on total assets decreased to approximately 3.0% from 15.5% in the previous year[54]. - Return on equity decreased to approximately 3.4% from 18.3% in the previous year[54]. - The Group's net profit margin decreased from approximately 6.3% for the year ended 31 March 2018 to approximately 2.1% for the Review Year[59]. Risks and Compliance - The Group faces industry risks related to the property market in Hong Kong, which could adversely impact the availability of foundation projects[60]. - Compliance risks may arise from changes in laws and regulations, potentially increasing costs and affecting business operations[66]. - The Group may incur additional costs due to unexpected geological conditions during foundation works, leading to potential cost overruns[70]. - Damage to underground service utilities during foundation works may result in liabilities for repair costs not covered by insurance[73]. - The Group's ability to secure new contracts may vary significantly, making it difficult to forecast future business volume[74]. Corporate Governance - The Group is committed to maintaining good corporate governance to safeguard shareholder interests and maximize shareholder value[170]. - The Company has adopted the corporate governance code contained in Appendix 14 to the Listing Rules, ensuring compliance with all code provisions from the Listing Date to March 31, 2019[172][173]. - The Board consists of five members, including one executive Director and four independent non-executive Directors, ensuring a balanced composition for effective independent judgment[178][180]. - The Company has appointed three independent non-executive Directors, meeting the requirement that they represent at least one-third of the Board members[184]. - All independent non-executive Directors have provided an annual confirmation of independence, and the Company believes they are independent according to the relevant Listing Rules[185]. Management and Staff - The Group provides a comprehensive remuneration package to attract and retain employees, including salary, discretionary bonuses, and cash subsidies[89]. - As of March 31, 2019, the total staff cost incurred by the Group was approximately HK$84.8 million, a decrease from approximately HK$97.5 million in the corresponding year ended March 31, 2018[123]. - As of March 31, 2019, the Group employed a total of 210 full-time employees, down from 249 full-time employees as of March 31, 2018[123]. - The Board resolved not to recommend the declaration of a final dividend for the Review Year, consistent with the previous fiscal year[126]. Directors and Their Roles - Mr. Ye, the Group's chairman and CEO, has over 40 years of experience in the foundation industry and co-founded the Group in 1993[132]. - Mr. Cheung, an executive director, has over 20 years of experience in the foundation industry and joined the Group in 1996[135]. - Mr. Lo, an independent non-executive director, has an annual director's fee of HK$180,000 and is responsible for independent oversight of management[137]. - Mr. Chan has over 10 years of professional accounting and financial reporting experience, including roles at Kam & Cheung CPA and BDO Limited[142]. - The remuneration of Directors is determined based on the Group's operating results, individual performance, and comparable market statistics[125].
龙昇集团控股(06829) - 2019 - 年度财报