Financial Performance - The Group's total revenue for the year ended December 31, 2024, was approximately HK$139.6 million, a year-on-year decrease of approximately 21.8% from HK$178.5 million in 2023[13]. - Loss attributable to the owners of the Company for the year amounted to approximately HK$48.7 million, compared to a profit of approximately HK$8.0 million in 2023[13]. - The decline in revenue of approximately HK$38.9 million was primarily due to the weakened economy in China[14]. - The Group's total revenue for the year was approximately HKD 139.6 million, a decrease of about 21.8% compared to HKD 178.5 million in the previous year[17]. - The Group reported a loss attributable to owners of approximately HKD 48.7 million, compared to a profit of HKD 8.0 million in the previous year[17]. - The decline in revenue was primarily due to a decrease of approximately HKD 38.9 million from the sluggish Chinese economy, and a one-time gain of HKD 17.8 million from a subsidiary in the previous year[17]. - The Group's gross profit amounted to approximately HK$83.6 million, a decrease of approximately 27.0% from HK$114.6 million in the Previous Year, with a gross profit margin of approximately 59.9%[47]. - Employee benefits expense increased to approximately HK$62.4 million, representing a rise of approximately 20.3% compared to HK$51.9 million in the Previous Year, largely due to share-based compensation costs[51]. - The Group recorded a loss attributable to owners of the Company of approximately HK$48.7 million, compared to a profit of approximately HK$8.0 million in the Previous Year, driven by increased employee benefits expenses and decreased revenue[59]. Business Expansion and Development - In December 2024, the first franchised coffee shop under the brand "Kafelaku Coffee" was opened in Wenzhou City, Zhejiang Province, China[15]. - The new coffee shop features a curated menu highlighting single-origin coffees and seasonal specials, with plans for further expansion in 2025[15]. - The Group intends to enhance its market share in the coffee sector by capitalizing on the growing café culture and improving customer experience[25]. - The Group is committed to diversifying its catering business and exploring expansion opportunities in both the restaurant and coffee sectors[25]. - The revenue from the new civet coffee franchising business in the PRC was approximately HK$1.0 million, which was a new revenue stream for the Group[46]. - The Group plans to develop its civet coffee business in Hong Kong and the PRC, with a planned allocation of HK$16.26 million, of which HK$12.797 million has been utilized[118]. Market Conditions and Challenges - The decline in revenue was primarily due to a decrease of approximately HKD 38.9 million from the sluggish Chinese economy, and a one-time gain of HKD 17.8 million from a subsidiary in the previous year[17]. - The Chinese restaurant sector in Hong Kong has shown resilience, maintaining steady demand for both traditional and modern Chinese cuisine despite economic challenges[19]. - The introduction of more accessible multiple-entry visas for PRC travelers is expected to counteract the impact of Hong Kong consumers traveling north, leading to a gradual market recovery[19]. - The Directors anticipate various challenges for the Group's business in the foreseeable future, despite expected improvements in the catering and coffee operation industry due to government stimulus policies[104]. - The Group's operations may be negatively impacted by external factors such as the China-US trade war and geopolitical tensions[115]. Environmental, Social, and Governance (ESG) Performance - The ESG Report covers the Group's ESG performance for the year ended December 31, 2024, and aligns with the reporting scope for the previous year, 2023[136]. - The Group's ESG Taskforce is responsible for identifying and prioritizing material ESG issues, with a focus on stakeholder engagement and materiality assessment[131]. - The Board oversees the Group's ESG governance and is responsible for establishing ESG strategies, reviewing risks and opportunities, and ensuring compliance with regulatory requirements[132]. - A materiality assessment was conducted to identify key ESG issues for 2024, which were confirmed by the Board and the ESG Taskforce[140]. - The Group's commitment to sustainable development is reflected in its environmental targets aimed at optimizing ESG performance[127]. - The Group has implemented environmental policies aimed at minimizing adverse environmental impacts, adhering to the principles of "Reduce, Reuse, Recycle and Replace"[159]. - The Group's nitrogen oxides (NOx) emissions decreased from 186.54 kg in FY2023 to 161.88 kg in FY2024, representing a reduction of approximately 13.2%[167]. - Sulphur oxides (SOx) emissions slightly decreased from 0.58 kg in FY2023 to 0.55 kg in FY2024, a reduction of about 5.2%[167]. - Particulate matter (PM) emissions decreased from 10.32 kg in FY2023 to 8.27 kg in FY2024, indicating a reduction of approximately 20%[167]. - Direct GHG emissions (Scope 1) decreased from 1,093.43 tCO2e in FY2023 to 1,043.62 tCO2e in FY2024, a reduction of about 4.6%[173]. - Energy indirect GHG emissions (Scope 2) decreased significantly from 2,246.81 tCO2e in FY2023 to 1,545.00 tCO2e in FY2024, representing a reduction of approximately 31.2%[173]. - Total GHG emissions (Scope 1 and 2) decreased from 3,340.24 tCO2e in FY2023 to 2,588.62 tCO2e in FY2024, a reduction of about 22.5%[173]. Employee and Shareholder Matters - As of December 31, 2024, the Group had approximately 378 employees, a decrease from 430 in 2023, with employee benefits expense increasing by approximately 20.2% to HK$ 62.4 million[97]. - The Company allotted 110,500,000 shares to employee participants under the share scheme, pending performance targets[84]. - The Board resolved not to recommend the payment of any final dividend for the Year, consistent with 2023[103]. - The Group's gearing ratio was irrelevant as of December 31, 2024, due to a deficit in shareholders' equity, prompting the Directors to monitor and adjust business strategies accordingly[76]. Operational Strategies and Future Plans - The Group aims for steady growth and prudent expansion in Hong Kong while progressively expanding in the PRC market[110][113]. - The Group is currently undergoing a rebranding process and developing its civet coffee business, which includes a franchising operation under the "Kafelaku Coffee" brand[125]. - The Group is considering expanding its food catering and beverage business into other cuisines and operation modes to maximize shareholder returns[111][114]. - The Group is focusing on online marketing to promote existing business and increase market share[110][113].
利宝阁集团(01869) - 2024 - 年度财报