FAIRWOOD HOLD(00052)2024-12-30 09:25Financial Performance - Revenue for the six months ended September 30, 2024 decreased by 0.3% to HKD 1.5535 billion (2023: HKD 1.5580 billion)[4] - Gross profit margin declined to 7.5% (2023: 9.4%)[4] - Profit attributable to equity shareholders for the period was HKD 15.52 million (2023: HKD 36.32 million)[4] - Basic earnings per share were 11.98 HK cents (2023: 28.03 HK cents)[4] - Profit for the period was HKD 36,317,000 for the six months ended September 30, 2024[39] - Pre-tax profit for the six months ended September 30, 2024, was HKD 17,774,000, compared to HKD 43,409,000 in the same period last year[42] - Net profit for the period was HKD 15,521 thousand, with total comprehensive income of HKD 14,930 thousand[56] - Pre-tax profit from the Hong Kong restaurant segment was HKD 31,422 thousand, with a valuation gain on investment properties of HKD 1,270 thousand[68] - Basic earnings per share for the six months ended September 30, 2024, were HK$15,521,000, compared to HK$36,317,000 in the same period in 2023, based on 129,553,000 weighted average shares[78] - Revenue from food and beverage sales for the six months ended September 30, 2024, was HK$1,550,241,000, slightly down from HK$1,555,581,000 in the same period in 2023[87] - The company's total revenue for the six months ended September 30, 2024, was HK$1,553,451,000, compared to HK$1,558,003,000 in the same period in 2023[87] - The annualized average return on equity was 4.8%, down from 7.6% in the previous year[188] Assets and Liabilities - Total assets minus current liabilities stood at HKD 1.3225 billion (2023: HKD 1.3895 billion)[24] - The company's net asset value was HKD 637.3 million (2023: HKD 660.4 million)[24] - Non-current assets increased to HKD 1,479,064,000 as of September 30, 2024, compared to HKD 1,451,413,000 on March 31, 2024[35] - Current assets decreased to HKD 771,126,000 as of September 30, 2024, from HKD 796,398,000 on March 31, 2024[35] - Net current liabilities increased to HKD (156,565,000) as of September 30, 2024, compared to HKD (61,945,000) on March 31, 2024[37] - Total equity decreased to HKD 637,300,000 as of September 30, 2024, from HKD 660,405,000 on March 31, 2024[53] - The group's total current assets were HKD 771,126 thousand, and total current liabilities were HKD 927,691 thousand, resulting in a net current liability of HKD 156,565 thousand[58] - The company's total assets amounted to HKD 2.2502 billion as of September 30, 2024, with a net current liability of HKD 156.6 million[186] - The company's inventory as of September 30, 2024, was HK$57,964,000, up from HK$52,651,000 as of March 31, 2024[104] - The company's accounts payable and accrued expenses as of September 30, 2024, were HK$456,905,000, up from HK$412,200,000 as of March 31, 2024[108] - The company's deferred tax assets and liabilities as of September 30, 2024, included a temporary difference of HK$209,000, compared to HK$792,000 in the same period in 2023[92] - The net book value of properties pledged as collateral for bank standby credit facilities was HK$671,000 as of September 30, 2024 (compared to HK$721,000 as of March 31, 2024)[118] - Accounts receivable (net of impairment) decreased to HK$9,384,000 as of September 30, 2024, from HK$20,460,000 as of March 31, 2024[121] - The maximum liability under the bank standby credit facilities guaranteed by the company was HK$87,185,000 as of September 30, 2024 (compared to HK$87,702,000 as of March 31, 2024)[136] - The group's right-of-use assets and lease liabilities increased to HK$11,375,000 and HK$11,492,000 respectively as of September 30, 2024[160] - The group confirmed right-of-use assets and lease liabilities of HK$3,340,000 and HK$5,001,000 respectively as of September 30, 2024[140] Cash Flow and Liquidity - Cash and cash equivalents decreased to HKD 349,873,000 as of September 30, 2024, from HKD 483,150,000 on September 30, 2023[40] - Operating cash flow generated was HKD 308,269,000 for the six months ended September 30, 2024[40] - The company's bank deposits and cash equivalents stood at HKD 595,792,000 as of September 30, 2024[42] - The company expects future cash flows from operations to strengthen its financial position over the next 12 months[42] - Operating activities generated a net cash inflow of HKD 306,636 thousand, while investment activities used a net cash outflow of HKD 259,045 thousand[57] - Cash and cash equivalents as of September 30, 2024, were HK$349,873,000, down from HK$538,322,000 as of March 31, 2024[107] - The company's net cash generated from operating activities was HKD 306.6 million[187] - The company has no bank loans and a capital gearing ratio of 0.0%[187] Dividends and Shareholder Information - The company declared an interim dividend of 5.0 HK cents per share, totaling HKD 6,478 thousand, compared to 11.0 HK cents per share in the previous year[76] - The final dividend per share for the fiscal year ended March 31, 2024, is HK$0.30 (compared to HK$0.40 for the fiscal year ended March 31, 2023), totaling HK$38,866,000 (compared to HK$51,821,000 in the previous year)[115] - Luo Kaiyang holds 57,544,384 shares, representing 44.42% of the total issued shares as of September 30, 2024[200] - Luo Huicheng holds 56,475,384 shares, representing 43.59% of the total issued shares as of September 30, 2024[200] - Li Biqi holds 702,000 shares, representing 0.54% of the total issued shares as of September 30, 2024[200] Operational Highlights - The company launched a soft meal program targeting the elderly and individuals with swallowing difficulties, which has significant growth potential and generated media value exceeding HKD 6 million[5] - The company is focusing on the high-growth potential evening market and expanding its "value-for-money" product offerings to cater to cost-conscious customers[1] - The company expects growth opportunities from the trend of downward adjustment in dining consumption due to economic pressures[6] - The company has strengthened its community engagement by setting up mobile swallowing assessment stations in its restaurants, providing professional speech therapy consultations[5] - The group introduced new high-value dinner menu items and expanded popular dishes, driving customer traffic and average spending[147] - The "Eat Well GYM" promotion campaign was expanded with new sponsorships and KOL collaborations to enhance brand awareness[148] - The number of registered members on the Fairwood App exceeded 920,000, becoming a key promotional tool[149] - The group launched a soft meal plan in October 2024, targeting the elderly and individuals with chewing and swallowing difficulties[169] - The company's "Happy Elderly Card" membership exceeded 530,000 by the end of the period[170] - The company operates 149 Fast Food outlets and 10 specialty restaurants in Hong Kong, including the newly launched Italian restaurant "Ombra"[170] - The company's specialty restaurants, including "ASAP," "一碗肉燥," and "一葉小廚," performed steadily during the period[170] - The company's new soft meal program is expected to have significant development potential in the future[172] Employee and Compensation - Total number of employees decreased to 5,600 as of September 30, 2024, from 5,700 as of March 31, 2024[196] - The company provides competitive compensation, stock options, and bonuses to eligible employees based on performance[196] - The company maintains training and development programs to improve employee quality, capabilities, and skills[196] - The group's salary and short-term employee benefits decreased to HK$7,196,000 for the six months ended September 30, 2024, compared to HK$7,783,000 in the same period in 2023[159] - The group's defined contribution retirement plan contributions remained unchanged at HK$18,000 for the six months ended September 30, 2024 and 2023[159] Investments and Capital Expenditures - The company's capital expenditures for other properties, plant, and equipment for the six months ended September 30, 2024, were HK$130,969,000, up from HK$50,649,000 in the same period in 2023[100] - The company's right-of-use assets increased by HK$35,212,000 for the six months ended September 30, 2024, compared to HK$82,990,000 in the same period in 2023[100] - The company's outstanding capital commitments totaled HKD 30.82 million as of September 30, 2024[192] - The company's investment properties were revalued, resulting in a gain of HK$1,270,000 for the six months ended September 30, 2024, compared to a loss of HK$1,030,000 in the same period in 2023[78] - The weighted average exercise price of unexercised share options as of September 30, 2024, was HK$11.456 (unchanged from March 31, 2024), with a weighted average remaining contractual life of 8.76 years (compared to 9.27 years as of March 31, 2024)[131] Contingent Liabilities and Guarantees - The company's maximum contingent liability for guarantees on subsidiary loans and standby credits is HKD 87.19 million as of September 30, 2024[193] - The company has not recognized any deferred income related to these guarantees due to the small amount[194] Other Financial Information - Other income for the period was HKD 13,241 thousand, primarily from interest income, compared to HKD 14,545 thousand in the previous year[70] - Total expenses for the period were HKD 1,516,752 thousand, including HKD 371,201 thousand for inventory costs and HKD 563,227 thousand for employee costs[71] - Inventory write-downs for the six months ended September 30, 2024, were HK$5,415,000 (compared to HK$83,000 in the same period in 2023)[123] - Impairment losses on right-of-use assets and other property, plant, and equipment amounted to HK$10,083,000 for the six months ended September 30, 2024 (compared to HK$6,312,000 in the same period in 2023)[117][118] - Depreciation of right-of-use assets and interest on lease liabilities for the six months ended September 30, 2024, were HK$1,030,000 and HK$207,000, respectively (compared to HK$1,062,000 and HK$119,000 in the same period in 2023)[139] - The company's subsidiary renewed a three-year lease for a property with Qingli Limited, generating depreciation of HK$923,000 and lease liability interest of HK$100,000 for the six months ended September 30, 2024[140] - The group's financial instruments recorded at cost or amortized cost showed little difference between their carrying amounts and fair values as of September 30, 2024[158]