Financial Performance - Revenue for the year ended March 31, 2022, was HK$294,120,000, representing a 31.3% increase from HK$224,081,000 in 2021[14] - Loss attributable to owners of the Company decreased to HK$32,013,000 in 2022 from HK$124,269,000 in 2021, a reduction of 74.2%[14] - Basic and diluted loss per share improved to HK(2.8) cents from HK(11.6) cents, reflecting a 75.9% decrease in loss per share[14] - The company reported a revenue less cost of inventories of HK$220,256,000, a 32.3% increase from HK$166,560,000 in 2021[14] - For the year ended 31 March 2022, the Group's revenue increased by approximately HK$70.0 million, or 31.2%, to approximately HK$294.1 million from approximately HK$224.1 million for the year ended 31 March 2021[27] - The Group's gross profit increased by approximately 32.2% from approximately HK$166.6 million for the year ended March 31, 2021, to approximately HK$220.2 million for the year ended March 31, 2022[36] - The gross profit margin increased from 74.3% for the year ended 31 March 2021 to 74.9% for the year ended 31 March 2022[36] - The loss for the year decreased by approximately HK$92.3 million, from HK$124.3 million to HK$32.0 million, primarily due to the factors discussed above[45][49] Cost Management - The cost of food and beverages increased by approximately 28.5%, from approximately HK$57.5 million for the year ended 31 March 2021 to approximately HK$73.9 million for the year ended 31 March 2022[35] - Staff costs increased by approximately 16.6%, from approximately HK$92.6 million for the year ended 31 March 2021 to approximately HK$108.0 million for the year ended 31 March 2022[37] - The Group's staff costs as a percentage of revenue decreased to 36.7% for the year ended 31 March 2022, down from 41.3% in the previous year[37] - Property rentals and related expenses decreased significantly by approximately 67.3%, from HK$49.9 million to HK$16.3 million, due to a reduction in the number of operational restaurants and rent concessions[41] - Employee costs rose by approximately 16.6% from HK$92.6 million in the previous year to approximately HK$108.0 million, while the percentage of employee costs to revenue decreased from 41.3% to 36.7%[40] Operational Changes - The number of restaurants operated by the Group decreased from 11 at the beginning of the year to 9 at the end of the year[31] - The temporary suspension of restaurants in the fourth quarter significantly affected performance due to tightened COVID-19 measures[27] - The Group operates seven Chinese full-service restaurants under the brand "Palace" and one restaurant under the brand "Royal Courtyard" as of 31 March 2022[32] - The Group plans to seek suitable locations for new restaurants to prepare for economic recovery and expand its footprint in the banquet industry[21] Financial Ratios - Gross profit margin increased to 74.9% in 2022, up from 74.3% in 2021[16] - Net loss margin improved to (10.9%) in 2022 compared to (55.5%) in 2021[16] - Current ratio decreased slightly to 0.7 times in 2022 from 0.8 times in 2021[16] - Quick ratio also decreased to 0.6 times in 2022 from 0.8 times in 2021[16] - Gearing ratio increased significantly to 236.8% in 2022 from 125.9% in 2021[16] - The Group's total borrowings decreased to approximately HK$44.4 million from HK$64.0 million, with a gearing ratio increase to approximately 236.8% from 125.9%[58][59] - The Group's debt-to-equity ratio increased to approximately 236.8% as of March 31, 2022, compared to 125.9% in 2021, primarily due to losses incurred during the year[64] Cash and Investments - As of March 31, 2022, the Group's cash and cash equivalents were approximately HK$100.2 million, down from HK$147.5 million in the previous year[54][56] - Capital expenditure for the year was approximately HK$4.4 million for acquiring property, plant, and equipment, down from HK$12.0 million in the previous year[54][56] - As of March 31, 2022, the Group did not hold any significant investments[78] - A life insurance policy deposit of approximately HK$15.9 million was pledged to secure the Group's bank borrowings as of March 31, 2022[72] Corporate Governance - The Company does not recommend the payment of a final dividend for the financial year ended 31 March 2022, consistent with the previous year[104] - The Group has complied with relevant laws and regulations, with no material breaches reported during the year under review[125] - The Group has established a restaurant licensing compliance committee to oversee licensing compliance matters and report to the Board at least four times a year[124] - The Directors will continuously evaluate the Group's business objectives and modify plans according to changing market conditions[103] Shareholder Information - On December 15, 2021, Wonderful Cosmos Limited and others acquired 685,000,000 shares, representing approximately 59.57% of the total issued share capital of the Company for HK$157,550,000[79] - The issued share capital of the Company as of March 31, 2022, was 1,150,000,000 ordinary shares of HK$0.01 each[139] - The Company has maintained appropriate insurance coverage for Directors against liabilities incurred while performing their duties[180] - The Company has no arrangements allowing any Director or chief executive to hold interests or short positions in shares or debentures of the Company or its associated corporations[190] Employee Relations - The Group maintained a good relationship with its employees, providing competitive remuneration and continuous training to retain and motivate them[156] - There were no material disputes between the Group and its employees, suppliers, or customers during the Reporting Year[157] - The Group had approximately 137 employees as of March 31, 2022, a decrease from 290 employees in 2021[68] Environmental, Social, and Governance (ESG) - The Group is committed to ensuring that all business activities are economically, socially, and environmentally sustainable[126] - The Group has identified various ESG areas and has taken measures to control environmental and social impacts during its operations[129] - The Group made total charitable contributions amounting to approximately HK$667,000 during the Reporting Year, consistent with the previous year[152] - The Group's profitability may be adversely affected if it cannot enter into new lease agreements or renew existing leases on commercially acceptable terms[110] - The Group's profitability significantly depends on its ability to manage procurement costs for food and beverages, which can fluctuate and be volatile[111]
维力生活科技(01703) - 2022 - 年度财报