CLASSIFIED GP(08232) - 2024 - 中期业绩

Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, total revenue was HKD 17.78 million, a 1.8% decrease, while loss expanded to HKD 2.996 million from HKD 1.641 million due to reduced other income, with basic loss per share increasing to 9.58 HK cents Summary of Consolidated Statement of Profit or Loss | Indicator | For the six months ended June 30, 2024 (Thousand HKD) | For the six months ended June 30, 2023 (Thousand HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 17,777 | 18,104 | -1.8% | | Other income | 206 | 1,150 | -82.1% | | Loss before tax | (2,996) | (1,641) | +82.6% | | Loss for the period | (2,996) | (1,641) | +82.6% | | Basic loss per share (HK cents) | (9.58) | (6.36) | +50.6% | - The expanded loss is primarily due to reduced management fee income from an associate and decreased revenue influenced by changes in consumer spending patterns[52] Consolidated Statement of Financial Position As of June 30, 2024, net assets decreased to HKD 14.82 million from HKD 17.82 million, with total assets declining and bank balances and cash significantly dropping to HKD 0.27 million, tightening liquidity Summary of Consolidated Statement of Financial Position | Indicator | June 30, 2024 (Thousand HKD) | December 31, 2023 (Thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 3,078 | 2,941 | +4.7% | | Current assets | 25,967 | 32,993 | -21.3% | | - Of which: Bank balances and cash | 270 | 6,185 | -95.6% | | Current liabilities | 13,407 | 16,640 | -19.4% | | Net assets | 14,823 | 17,819 | -16.8% | Consolidated Statement of Changes in Equity For the six months ended June 30, 2024, total equity attributable to owners of the Company decreased by HKD 2.996 million from HKD 17.82 million to HKD 14.82 million, solely due to the loss incurred during the period - The total decrease in equity during the period (HKD 2.996 million) equals the total loss attributable to owners of the Company[10] Consolidated Statement of Cash Flows Net cash and cash equivalents decreased by HKD 5.915 million during the period, with net cash outflow from operating activities significantly improving to HKD 0.684 million, but financing activities resulted in a HKD 5.49 million outflow, leading to a period-end cash balance of HKD 0.27 million Summary of Cash Flow Statement | Activity | For the six months ended June 30, 2024 (Thousand HKD) | For the six months ended June 30, 2023 (Thousand HKD) | | :--- | :--- | :--- | | Net cash used in operating activities | (684) | (5,779) | | Net cash from/(used in) investing activities | 259 | (511) | | Net cash from/(used in) financing activities | (5,490) | 6,716 | | Net decrease in cash and cash equivalents | (5,915) | 426 | | Cash and cash equivalents at beginning of period | 6,185 | 1,736 | | Cash and cash equivalents at end of period | 270 | 2,162 | Notes to the Unaudited Condensed Consolidated Financial Statements Revenue and Segment Information All Group revenue is derived from the casual dining restaurant business, which recorded HKD 17.78 million in revenue and a segment loss of HKD 1.368 million during the reporting period - The Group's operating and reportable segment is the casual dining restaurant business, primarily operating casual restaurants aimed at creating a relaxed atmosphere[17] Segment Results | Item | For the six months ended June 30, 2024 (Thousand HKD) | For the six months ended June 30, 2023 (Thousand HKD) | | :--- | :--- | :--- | | Segment revenue | 17,777 | 18,104 | | Segment result (loss) | (1,368) | (1,005) | Analysis of Operating Results Other income sharply decreased to HKD 0.206 million from HKD 1.15 million due to reduced management fee income from an associate, while finance costs increased, with no profits tax payable and no interim dividend declared - Management fee income from an associate significantly decreased from HKD 1.069 million in the prior period to HKD 0.06 million in the current period, which is the primary reason for the decline in other income[25] - Finance costs, entirely comprising interest on lease liabilities, increased from HKD 0.117 million in the prior period to HKD 0.187 million[26] - The Board decided not to declare any dividend for the interim period[30] Assets and Liabilities As of the reporting period end, total trade receivables were HKD 0.331 million (mostly within 30 days) and total trade payables were HKD 1.709 million (over half due within 60 days), with an increase in overdue items beyond 90 days compared to year-end 2023 - The Group grants corporate customers a 30-day credit period, while individual customer transactions are primarily settled by cash and credit card[35][36] Aging Analysis of Trade Receivables and Payables (Thousand HKD) | Aging | Receivables (2024/6/30) | Payables (2024/6/30) | | :--- | :--- | :--- | | 0 to 30 Days | 281 | 762 | | 31 to 60 Days | 3 | 680 | | 61 to 90 Days | 3 | 151 | | Over 90 Days | 44 | 116 | | Total | 331 | 1,709 | Changes in Equity No changes in share capital occurred during the reporting period; however, prior share consolidation and rights issue in 2023 increased total issued share capital to HKD 11.15 million - On September 7, 2023, the Company conducted a share consolidation, merging every twenty old shares of HKD 0.01 par value into one new share of HKD 0.2 par value[43] - On October 25, 2023, the Company completed a rights issue, issuing 33.45 million rights shares at HKD 0.426 per share, with net proceeds of approximately HKD 12.81 million[44] Related Party Transactions The Group engages in various related party transactions with director-controlled entities, but the termination of a management service agreement with Yuet On Company Limited in October 2023 significantly impacted current period management fee income Key Related Party Transactions (Thousand HKD) | Transaction Type | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Management fee income from Yuet On Company Limited | – | 1,009 | | Management fees paid to Great Asia Wine | 462 | 643 | | Purchase of goods from Great Asia Wine | 100 | 72 | - The management service agreement with Yuet On Company Limited, controlled by Directors Mr. Wong and Mr. Pong, terminated on October 31, 2023[46] Management Discussion and Analysis Industry and Business Review Hong Kong's catering industry faces challenges from changing consumer patterns and rising costs, leading to a 1.8% year-on-year revenue decrease for the Group's flagship brand "Classified" to HKD 17.8 million - Hong Kong's catering industry faces challenges from changing consumer spending patterns (northbound travel, prudent spending) and rising costs, adversely impacting the Group's performance[47] - The Group has implemented cost-saving measures, such as reducing staff costs and negotiating with suppliers, while increasing marketing efforts and expanding its takeaway product line to address difficulties[47] - For the six months ended June 30, 2024, the Group recorded net revenue of approximately HKD 17.8 million, a decrease of approximately 1.8% compared to the same period last year[48] Future Prospects and Risks Management anticipates continued challenges for Hong Kong's catering industry, identifying key risks such as changing consumer patterns, site selection difficulties, raw material price volatility, and labor shortages, with plans to expand takeaway services and enhance existing facilities - Key risks include: - Changes in consumer dining habits and northbound travel trends - Difficulty in finding ideal locations or renewing leases on favorable terms - Volatility in food raw material prices, especially for imported products affected by exchange rates - Labor shortages and intense talent competition in the catering industry[49] - Response strategies include: - Expanding the takeaway product line and increasing promotional efforts - Improving and upgrading existing restaurant facilities to attract customers - Closely monitoring raw material quotations to ensure price competitiveness[50] Financial Review Total turnover for the period was approximately HKD 17.8 million, a 1.8% year-on-year decrease, with loss attributable to owners of the Company expanding to HKD 3.0 million due to reduced management fee income and changing consumer spending patterns - For the six months ended June 30, 2024, total turnover was approximately HKD 17.8 million, a 1.8% year-on-year decrease[52] - Total loss attributable to owners of the Company was approximately HKD 3.0 million, compared to HKD 1.6 million in the prior period[52] Liquidity and Capital Structure As of June 30, 2024, the Group's liquidity significantly tightened with bank balances and cash at HKD 0.27 million, and while the current ratio remained at 1.94, the quick ratio sharply declined to 0.29, indicating increased reliance on inventory Liquidity Ratios | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank balances and cash (Million HKD) | 0.3 | 6.2 | | Current Ratio | 1.94 | 1.98 | | Quick Ratio | 0.29 | 0.66 | | Gearing Ratio | 0% | 0% | Employees and Remuneration Policy To cope with operating pressures, the Group streamlined its workforce, reducing employees in Hong Kong to 52 as of June 30, 2024, from 66 in the prior period, with remuneration based on market levels and individual performance - As of June 30, 2024, the Group's headcount was 52 employees, a 21% decrease from 66 employees in the prior period[58] Other Information Use of Proceeds The HKD 12.81 million from the 2023 rights issue has been fully utilized, while approximately HKD 23.16 million from the 2017 placing remains unutilized for restaurant upgrades, with its utilization period extended to December 31, 2025, due to market uncertainties - Approximately HKD 23.158 million from the November 2017 placing remains unutilized, earmarked for "restaurant upgrades," with the expected utilization period extended to the end of 2025[61][62][63] - Net proceeds of approximately HKD 12.806 million from the October 2023 rights issue were fully utilized in the first half of 2024, primarily for repayment of shareholder loans and replenishment of working capital[64][65] Directors' and Chief Executives' Interests As of June 30, 2024, two executive directors, Mr. Wong Tze Chuen and Mr. Pong Kin Yee, held substantial equity stakes of 24.8% and 40.9% respectively through controlled corporations, indicating high ownership concentration among key management Directors' Shareholdings | Director Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wong Tze Chuen | Interest in controlled corporation | 13,843,692 | 24.8% | | Mr. Pong Kin Yee | Interest in controlled corporation | 22,771,433 | 40.9% | Corporate Governance The Company deviates from corporate governance best practices by not segregating the roles of Chairman and CEO, both held by Mr. Wong Tze Chuen, and acknowledges the lack of gender diversity on its Board, committing to appoint a director of a different gender by December 31, 2024 - The Company deviates from Corporate Governance Code Provision C.2.1, as the roles of Chairman (Mr. Wong Tze Chuen) and Chief Executive Officer are not segregated[76] - The Company acknowledges that the Board's gender composition does not meet diversity requirements and plans to appoint at least one director of a different gender by December 31, 2024[76]