Financial Performance - The company reported a loss attributable to shareholders of HKD 69 million for the six months ended June 30, 2024, compared to a loss of HKD 18 million in the same period last year, primarily due to a decline in retail sales caused by outbound tourism and cross-border shopping trends [3]. - Total retail sales value in Hong Kong decreased by 6.6% year-on-year in the first half of 2024, impacting the company's performance [4]. - Unicorn reported a post-tax loss of HKD 53 million for the six months ended June 30, 2024, compared to a loss of HKD 54 million in 2023 [13]. - The group recorded a total post-tax loss of HKD 64 million from Citistore and Unicorn for the six months ended June 30, 2024, compared to a loss of HKD 13 million in 2023 [14]. - Operating loss for the period was HKD 61 million, significantly higher than the HKD 5 million loss reported in the same period last year [31]. - Loss before tax was HKD 82 million, compared to a loss of HKD 21 million in the previous year [31]. - The net loss attributable to shareholders for the period was HKD 69 million, compared to HKD 18 million in the same period of 2023 [31]. - The company reported a total comprehensive loss of HKD 14 million for the six months ended June 30, 2024, compared to a total comprehensive loss of HKD 18 million for the same period in 2023 [37]. - The company experienced a pre-tax loss of HKD 82 million for the six months ended June 30, 2024, compared to a loss of HKD 21 million for the same period in 2023 [40]. - The company recorded a pre-tax operating loss of HKD 83 million, compared to a loss of HKD 18 million in the same period last year, reflecting a significant increase in losses [54]. Revenue and Sales - Total revenue for the six months ended June 30, 2024, was HKD 772 million, a decrease of 3.0% from HKD 796 million in the same period of 2023 [31]. - Sales from self-operated products at Citistore decreased by 10% to HKD 146 million, with a gross margin of 31%, down from 33% in the previous year [6][8]. - Total sales from consignment and franchise counters at Citistore fell by 13% to HKD 155 million, with consignment sales contributing HKD 103 million and franchise sales contributing HKD 52 million [9]. - Unicorn's total sales remained stable at HKD 587 million, with self-operated product sales increasing by 5% to HKD 433 million, while consignment sales decreased by 11% to HKD 154 million [12]. - Revenue from consignment sales was HKD 690 million, a decrease of 13% compared to HKD 792 million in the same period last year [48]. - Commission income from consignment counters decreased to HKD 136 million, down 13% from HKD 156 million in the previous year [47]. - Commission income from franchise counters also saw a decline, falling to HKD 52 million from HKD 59 million [47]. - Sales revenue increased slightly to HKD 579 million, up from HKD 575 million year-on-year [47]. - Other income decreased to HKD 6 million from HKD 8 million, with sponsorship fees and miscellaneous income contributing to this decline [49]. Expenses and Liabilities - Direct costs increased to HKD 774 million from HKD 746 million, resulting in a gross loss of HKD 2 million compared to a gross profit of HKD 50 million in the previous year [31]. - The group recognized rental and related expenses totaling HKD 58 million for the six months ended June 30, 2024, compared to HKD 56 million in 2023 [20]. - Depreciation expenses related to right-of-use assets amounted to HKD 130 million for the six months ended June 30, 2024, up from HKD 114 million in 2023 [20]. - The total employee costs, including contributions to defined contribution retirement plans, were HKD 128.6 million, slightly down from HKD 133.6 million in the prior year [51]. - The company’s depreciation of fixed assets increased to HKD 31 million for the six months ended June 30, 2024, compared to HKD 30 million for the same period in 2023 [40]. - The company recognized contract liabilities of HKD 12 million as of December 31, 2023, which are expected to be recognized as revenue within one year [68]. Cash Flow and Financial Position - The group’s cash and bank balance reached HKD 73 million as of June 30, 2024, down from HKD 85 million as of December 31, 2023 [15]. - The company reported a net cash outflow from operating activities of HKD 45 million for the six months ended June 30, 2024, compared to an inflow of HKD 74 million for the same period in 2023 [40]. - The company’s cash and cash equivalents decreased by HKD 12 million, from HKD 260 million at the beginning of the period to HKD 73 million at the end of June 30, 2024 [40]. - Current liabilities decreased to HKD 599 million from HKD 669 million, with a notable reduction in accounts payable and other payables [35]. - Total equity decreased to HKD 1,106 million from HKD 1,173 million, reflecting the net loss for the period [35]. - As of June 30, 2024, the total equity of the company was HKD 1,106 million, a decrease from HKD 1,173 million as of January 1, 2024, reflecting a loss of HKD 69 million during the period [38]. - The company’s net current liabilities as of June 30, 2024, were HKD 358 million, compared to HKD 414 million as of December 31, 2023 [42]. - Trade payables decreased from HKD 281 million as of December 31, 2023, to HKD 238 million as of June 30, 2024, reflecting improved cash flow management [68]. - Total lease liabilities decreased from HKD 924 million as of December 31, 2023, to HKD 795 million as of June 30, 2024, indicating a reduction in financial obligations [72]. Strategic Initiatives - Citistore's membership program has seen a positive response, with membership numbers increasing to approximately 700,000 [5]. - The company is expanding its product offerings by introducing high-quality food items from Canada and mainland China at Citistore [5]. - Unicorn has expanded its procurement range to include products from Asia, Europe, and the United States, enhancing its product variety [11]. - The company is focusing on creative promotional activities, such as tuna cutting demonstrations, to enhance customer experience and engagement [11]. - The integration of the customer loyalty programs CU APP and H • COINS is anticipated to expand the member base and enhance customer engagement [16]. - The group expects to streamline its store network to improve performance and operational efficiency due to a challenging retail environment [16]. Shareholder Information - As of June 30, 2024, Dr. Li Ka-shing and Dr. Li Ka-kit each held 2,110,868,943 shares, representing 69.27% of the company [88]. - Major shareholder Li Ka-shing holds 2,110,868,943 shares, representing 69.27% of the total equity [90]. - Gainwise Investment Limited holds 217,250,000 shares, accounting for 7.13% of the total equity [90]. - The company has a total of 15,000,000 non-voting deferred shares, representing 30% equity held by certain directors [89]. - The company’s directors, including Li Ka-shing and Li Ka-jie, have significant holdings in both voting and non-voting shares [89]. - The company has received exemptions from strict compliance with certain disclosure requirements under the Listing Rules [89]. Governance and Compliance - The interim results for the six months ending June 30, 2024, were reviewed by the company's auditors, PwC, in accordance with Hong Kong's review standards [80]. - The company complied with the applicable corporate governance code provisions during the reporting period [83]. - The board confirmed that all directors fully complied with the trading code for securities transactions [84]. - The report contains forward-looking statements based on current beliefs and expectations, which may differ significantly due to various risks and uncertainties [85].
恒基发展(00097) - 2024 - 中期财报