FAIRWOOD HOLD(HK:00052)2025-07-29 09:25Financial Performance - Profit attributable to equity shareholders amounted to HK$35.5 million, a decrease of 28.8% compared to HK$50.7 million in the previous year[14]. - Revenue was HK$3,100.1 million, down 1.2% from HK$3,136.9 million in the previous year[14]. - Basic earnings per share were HK27.43 cents, a decrease of 29.8% from HK39.10 cents in the previous year[14]. - The Group's operating profit was HK$72.3 million, compared to HK$98.5 million in the previous year, with a gross profit margin declining to 7.7% from 8.6%[26]. - Profit attributable to equity shareholders was HK$35.5 million, a decline of 30% from HK$50.7 million in 2024; excluding government grants, profit fell by 28.8% to HK$35.1 million[29]. - Operating profit decreased to HK$72.3 million from HK$98.5 million in 2024, with a gross profit margin of 7.7%, down from 8.6%[29]. - The Hong Kong restaurants segment profits decreased by 17.8% to HK$81.2 million, while the Mainland China restaurants segment loss increased by 121.2% to HK$14.6 million[102]. - Basic earnings per share decreased by 29.8% to HK27.43 cents for the year ended 31 March 2025, compared to HK39.10 cents in 2024[103]. - Total assets of the Group were HK$2,105.3 million, a decrease from HK$2,247.8 million in 2024[107]. - The Group's net current liabilities increased to HK$109.5 million from HK$61.9 million in 2024, with a current ratio of 0.9[107]. Dividends and Shareholder Returns - The proposed final dividend is HK17.0 cents per share, with a total annual dividend of HK22.0 cents, representing a payout ratio of approximately 80.2%[27]. - The Board recommended a final dividend of HK17.0 cents per share, down from HK30.0 cents in 2024, leading to a total dividend of HK22.0 cents for the year, representing approximately 80.2% of the Group's profit[30]. - The total amount of reserves available for distribution to equity shareholders as of March 31, 2025, was HK$253,786,000, down from HK$298,843,000 in 2024[173]. - The Company declared an interim dividend of HK5.0 cents per share and recommended a final dividend of HK17.0 cents per share for the year ended March 31, 2025[170]. Operational Developments - The Group opened 3 new stores and closed 5 underperforming stores in Hong Kong, ending the year with 147 outlets[68]. - Fairwood launched the Ah Wood Soft Meals program for elderly customers with eating difficulties, addressing the needs of up to 38% of elderly people in Hong Kong[53]. - The Group plans to open more restaurants in Hong Kong, taking advantage of low rental opportunities, while closing underperforming stores, expecting net growth in store numbers over the coming year[75]. - The Group will implement targeted micro strategies to adapt to new consumer behaviors, focusing on individual store performance and product innovation to drive increases in average check[76]. - Fairwood's initiative for repurposing coffee grounds and lemon rinds at 130 stores is estimated to have eliminated 280 tonnes of food waste in 2024/25[67]. Marketing and Customer Engagement - A marketing campaign themed "God of Claypots" was launched to promote the Hong Kong style claypot rice, resulting in significant social media engagement valued at approximately HK$1.5 million[47]. - Membership via the Fairwood app reached approximately 1.02 million, up from 790,000 last year, representing a growth rate of over 25%[50]. - Fairwood expanded its takeaway options, adding Roasted Butterflied Spring Chicken and Portuguese Egg Tarts, contributing to growth in this segment[45][46]. - The Group introduced various new products and special offers, including Classic Claypot Rice and Double-Boiled Soup, to enhance customer engagement and increase average spending[38][44]. Cost Management and Efficiency - The Group implemented cost-reduction measures, including leveraging low commercial rents and improving process efficiency to offset profit margin pressures[40]. - Administrative expenses decreased by 2.3% to HK$141.9 million, down from HK$145.3 million in 2024, mainly due to effective cost control measures[89]. - The Group's overall food costs fell year-on-year, aided by the introduction of new vendors for raw materials[60]. - The Group's rental costs have continued to decrease, providing opportunities for cost savings as it seeks competitive rental locations for future store openings[61]. Environmental and Social Responsibility - The Group's environmental initiatives included the installation of energy-efficient kitchen equipment and a Smart Kitchen System to monitor resource usage[66]. - Charitable and other donations made by the Group totaled HK$1,429,000 for the year ended March 31, 2025, compared to HK$846,000 in 2024[171]. Employee and Management Practices - The total number of employees decreased to approximately 5,500 from 5,700 in 2024, with staff costs for the year at approximately HK$1,096.2 million, slightly down from HK$1,100.4 million in 2024[130]. - The Group continues to offer competitive remuneration packages, share options, and bonuses to eligible staff based on performance[131]. - The Company is committed to providing training programs to enhance the quality, competence, and skills of all staff[131]. - The Group's employee remuneration is reviewed annually based on performance appraisals and other relevant factors[130]. Future Outlook and Strategy - The Group aims to strengthen its reputation for providing high-quality, value-for-money fast food experiences while achieving stable returns for shareholders[82]. - Despite economic challenges, the Group plans to continue its store expansion in Mainland China, ensuring low rent-to-sales ratios for new stores[78]. - The Group's financial position remains healthy despite the decline in profit and revenue[14]. Corporate Governance and Compliance - The Company has a comprehensive risk management policy detailed in the corporate governance report[152]. - The Board was not aware of any non-compliance with applicable laws and regulations that have a significant impact on the Group as of the report date[161].