Financial Performance - The Group's revenue for the nine months ended February 29, 2020, was approximately HK$42.4 million, representing a decrease of approximately 29.4% compared to the corresponding period in 2019[30]. - The Group recorded a total comprehensive loss of approximately HK$17.6 million for the nine months ended February 29, 2020, compared to a loss of approximately HK$17.5 million for the same period in 2019[30]. - Revenue for the nine months ended February 29, 2020, was HK$42,380,000, a decrease of 29.5% compared to HK$60,066,000 for the same period in 2019[52]. - Loss before income tax for the nine months was HK$17,612,000, compared to a loss of HK$17,482,000 in the same period last year[52]. - Total comprehensive loss for the period attributable to owners of the Company was HK$16,786,000, slightly improved from HK$16,899,000 in the previous year[52]. - The Group's loss attributable to owners for the nine months ended 29 February 2020 was HK$16.8 million compared to HK$16.9 million for the same period in 2019[130]. - The Group did not incur any current income tax expense for the nine months ended February 29, 2020, compared to HK$27,000 in the same period of 2019[114]. Revenue Breakdown - Revenue from clubbing and entertainment operations for the nine months was HK$30,982,000, down from HK$40,701,000 in 2019, indicating a decrease of about 23.9%[81]. - Restaurant operations generated revenue of HK$10,912,000 for the nine months, compared to HK$17,590,000 in the previous year, reflecting a decline of approximately 38.2%[90]. - Revenue from the clubbing and entertainment business decreased by approximately HK$11.8 million, or approximately 24.3%, from approximately HK$48.8 million for the nine months ended 28 February 2019 to approximately HK$37.0 million for the nine months ended 29 February 2020[140]. - Revenue from the restaurant business decreased by approximately HK$5.8 million, or approximately 52.1%, from approximately HK$11.2 million for the nine months ended 28 February 2019 to approximately HK$5.4 million for the nine months ended 29 February 2020[144]. - The clubbing and entertainment operations accounted for 87.3% of total revenue for the nine months ended 29 February 2020, while restaurant operations accounted for 12.7%[157]. Cost Management - Employee benefits expenses for the nine months were HK$14,368,000, a reduction of 18.5% from HK$17,615,000 in the prior year[52]. - Advertising and marketing expenses decreased to HK$6,159,000, down 26.9% from HK$8,429,000 in the previous year[52]. - Cost of inventories sold was HK$8,731,000, a decrease of 34.5% compared to HK$13,318,000 for the same period in 2019[52]. - Property rentals and related expenses decreased by approximately HK$18.7 million, or approximately 91.9%, from approximately HK$20.3 million for the nine months ended 28 February 2019 to approximately HK$1.7 million for the nine months ended 29 February 2020[168]. - Other expenses decreased by approximately HK$4.8 million, or approximately 31.5%, from approximately HK$15.1 million for the nine months ended 28 February 2019 to approximately HK$10.3 million for the nine months ended 29 February 2020[175]. - The Group successfully implemented cost-saving strategies, resulting in a decrease of approximately HK$2 million in the first half of the year[183]. Impact of External Factors - The ongoing US-China trade tensions and local political turmoil are expected to continue affecting consumption and the food and beverage, lifestyle, and entertainment industries in Hong Kong[145]. - The outbreak of COVID-19 has severely impacted the operating environment in retail and food and beverage businesses, leading to a decline in local customers and tourists[145]. - The overall business environment is expected to become more challenging in the forthcoming year due to reduced spending power and tourist numbers[145]. - The decline in revenue was attributed to uncertainties in the global economy, local political turmoil, and the outbreak of the epidemic affecting consumer sentiment and spending[161]. Strategic Initiatives - Management plans to strengthen market position by upgrading club facilities, refining business strategies, negotiating with partners, and enhancing operational efficiency[150]. - The Group aims to improve business performance and operating results to present satisfactory results and favorable returns to shareholders[150]. - The Group strategically positioned its venues to cover different segments of the night lifestyle and entertainment market[140]. Financial Reporting and Compliance - The Group's unaudited condensed consolidated financial statements for the nine months ended 29 February 2020 were prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs) and presented in Hong Kong Dollars (HK$) rounded to the nearest thousand (HK$'000) [64]. - The accounting policies applied in the preparation of the financial statements are consistent with those used in the previous financial year, except for the adoption of new HKFRSs effective from 1 January 2019 [67]. - The Group's financial statements reflect the impact of HKFRS 16, with lease payments allocated into principal and interest portions presented as financing cash flows [72]. - The financial statements are prepared under the historical cost basis, ensuring accuracy in reporting [64]. - The Group's financial reporting is consistent with applicable disclosures by the GEM Listing Rules and the Companies Ordinance in Hong Kong [64]. Use of Proceeds from Listing - The net proceeds from the Listing amounted to approximately HK$43.9 million after deducting the underwriting commission and other estimated expenses[183]. - As of February 29, 2020, a total of HK$28.8 million of the net proceeds had been utilized, leaving an unutilized balance of HK$15.1 million[186]. - HK$18.8 million was allocated for expanding and diversifying the outlet network, with HK$11.0 million utilized and HK$7.8 million remaining[186]. - Marketing efforts accounted for HK$16.1 million in allocation, with HK$8.8 million utilized and HK$7.3 million unutilized[186]. - The corporate image enhancement received HK$1.0 million, which was fully utilized[186]. - General working capital utilized HK$4.3 million, fully accounted for[186]. Business Operations - The Group's principal activities include clubbing, entertainment, and restaurant operations in Hong Kong, which are the main revenue sources[81]. - The Group operates two nightclubs, a sports-themed bar, an entertainment studio, and a restaurant focusing on Japanese-style dishes[138]. - A sports-themed bar named Paper Street was opened on July 20, 2018, as part of the expansion strategy[196]. - A standalone restaurant named Tiger San was opened on December 16, 2017, in Tsing Yi, as part of the restaurant operations expansion[200]. - The renovation and refurbishment of the club facilities, including Fly (now known as Mudita), were completed in October 2018[193].
新爱德集团(08412) - 2020 Q3 - 季度财报