毛记葵涌(01716) - 2023 - 中期财报

Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2022, the company shifted from profit to loss, with total revenue down 52.2% to HKD 22.99 million and a HKD 4.79 million loss attributable to owners Table: Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | For the six months ended Sep 30, 2022 (HKD Thousands) | For the six months ended Sep 30, 2021 (HKD Thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 22,985 | 48,076 | -52.2% | | Gross Profit | 3,855 | 10,656 | -63.8% | | Operating (Loss)/Profit | (6,282) | 637 | Shifted from profit to loss | | (Loss)/Profit Before Income Tax | (4,741) | 2,284 | Shifted from profit to loss | | (Loss)/Profit for the Period Attributable to Owners of the Company | (4,786) | 1,923 | Shifted from profit to loss | | Basic (Loss)/Earnings Per Share (HK Cents) | (1.77) | 0.71 | Shifted from profit to loss | Condensed Consolidated Statement of Financial Position As of September 30, 2022, total assets decreased 5.6% to HKD 83.21 million and total equity declined 6.2% to HKD 72.29 million, but the company maintains a sound financial position with strong liquidity Table: Condensed Consolidated Statement of Financial Position | Metric (HKD Thousands) | As of Sep 30, 2022 (Unaudited) | As of Mar 31, 2022 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 83,214 | 88,197 | -5.6% | | Total Liabilities | 10,924 | 11,121 | -1.8% | | Total Equity | 72,290 | 77,076 | -6.2% | | Cash and Cash Equivalents | 54,603 | 64,307 | -15.1% | Condensed Consolidated Statement of Changes in Equity For the six months ended September 30, 2022, the company's total equity decreased from HKD 77.08 million at the beginning of the period to HKD 72.29 million at the end, primarily due to a total comprehensive loss of HKD 4.79 million recorded during the period - During the reporting period, equity attributable to owners decreased from HKD 76.08 million to HKD 71.65 million due to a HKD 4.43 million loss for the period[12] Condensed Consolidated Statement of Cash Flows During the reporting period, cash flow from operating activities shifted from a net inflow of HKD 1.71 million to a net outflow of HKD 8.88 million, indicating weakened cash generation from core operations, with cash and cash equivalents decreasing by HKD 9.70 million to HKD 54.60 million at period-end Table: Condensed Consolidated Statement of Cash Flows | Activity Category (HKD Thousands) | For the six months ended Sep 30, 2022 | For the six months ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Cash (Used in)/From Operating Activities | (8,876) | 1,710 | | Net Cash Used in Investing Activities | (222) | (675) | | Net Cash Used in Financing Activities | (606) | (676) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (9,704) | 359 | | Cash and Cash Equivalents at End of Period | 54,603 | 84,715 | Notes to the Condensed Consolidated Financial Statements Revenue and Segment Information The company's total revenue primarily derives from digital, print, and other media services; during the period, digital media revenue slightly decreased by 6.4%, while other media services revenue sharply declined from HKD 23.27 million to HKD 0.03 million due to no major performance events, significantly impacting overall revenue Table: Segment Revenue | Segment Revenue (HKD Thousands) | For the six months ended Sep 30, 2022 | For the six months ended Sep 30, 2021 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Digital Media Services | 21,959 | 23,473 | -6.4% | | Print Media Services | 996 | 1,331 | -25.2% | | Other Media Services | 30 | 23,272 | -99.9% | | Total | 22,985 | 48,076 | -52.2% | - The Other Media Services segment shifted from a HKD 4.10 million profit in the prior period to a HKD 0.73 million loss this period, primarily due to a significant revenue decrease from no performance events[57] Nature of Expenses During the reporting period, total expenses, including cost of sales, selling and distribution, and administrative expenses, significantly decreased by 39.6% to HKD 28.67 million from HKD 47.45 million in the prior period, primarily driven by a reduction in production costs from HKD 28.58 million to HKD 12.63 million, directly linked to fewer performance events Table: Expense Items | Expense Item (HKD Thousands) | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Production Costs | 12,626 | 28,576 | -55.8% | | Employee Benefit Expenses | 11,284 | 15,451 | -27.0% | | Total Expenses | 28,668 | 47,451 | -39.6% | Dividends The Board did not declare any interim dividend for the six months ended September 30, 2022, consistent with the prior period's policy - The Board did not declare an interim dividend for the six months ended September 30, 2022 (six months ended September 30, 2021: nil)[42] Management Discussion and Analysis Business Review and Outlook Management anticipates a challenging outlook for the advertising and media industry due to economic recession; during the period, digital media revenue slightly declined due to competition, print media revenue decreased from reduced book fair sales, and other media services revenue sharply fell due to no major performance events, which was the primary cause of overall performance decline, with the Group aiming to enhance brand awareness and diversify event content - Digital media services revenue slightly decreased from HKD 23.5 million to HKD 22.0 million, primarily due to intense competition and more cautious customer spending[55] - Other media services revenue sharply declined from HKD 23.3 million to HKD 1.5 million, shifting from profit to loss, mainly due to no performance events during the period[57] - Looking ahead, the Group anticipates a challenging outlook for the advertising and media industry and will focus on enhancing brand awareness and diversifying event content[54] Financial Review During the reporting period, total revenue decreased by 52% year-on-year to HKD 23.0 million, primarily due to a significant decline in other media services revenue, leading to a 64% drop in gross profit and a decrease in gross profit margin from 22.2% to 16.8%, resulting in a pre-tax loss of HKD 4.7 million compared to a pre-tax profit of HKD 2.3 million in the prior period, compounded by impairment of trade receivables and inventory write-offs - Total revenue decreased by 52% from approximately HKD 48.1 million to approximately HKD 23.0 million, primarily due to reduced revenue from the Other Media Services segment[60] - Overall gross profit margin decreased from 22.2% in the prior period to 16.8% in the current period[63] - The company shifted from profit to loss, primarily due to reduced performance in other media services, additional impairment provisions for trade receivables, and inventory write-offs[67] Liquidity and Financial Resources As of September 30, 2022, the Group maintained a sound financial position, primarily funding operations through operating activities, holding HKD 54.60 million in bank balances and cash with a current ratio of 7.0 times and zero gearing ratio, reflecting no debt burden, while management adopts prudent treasury policies to closely monitor liquidity and receivables collection Table: Liquidity and Financial Resources Metrics | Metric | As of Sep 30, 2022 | As of Mar 31, 2022 | | :--- | :--- | :--- | | Net Current Assets (HKD Millions) | 59.6 | 65.9 | | Bank Balances and Cash (HKD Millions) | 54.6 | 64.3 | | Current Ratio | 7.0 times | 7.2 times | | Gearing Ratio | Zero | Zero | Business Strategies and Use of Proceeds The company continues to advance business strategies outlined in its prospectus, including hiring sales professionals and upgrading IT infrastructure; of the approximately HKD 53.50 million net proceeds from listing, HKD 47.63 million has been utilized as of September 30, 2022, with HKD 5.87 million remaining for potential M&A (HKD 5.35 million) and IT equipment upgrades (HKD 0.52 million), expected to be fully utilized by March 31, 2023, though preliminary discussions for potential acquisitions have concluded without formal agreements Table: Use of Proceeds | Use of Proceeds | Revised Allocation (HKD Millions) | Actual Use (HKD Millions) | Unutilized Amount (HKD Millions) | | :--- | :--- | :--- | :--- | | Mergers and Acquisitions/Strategic Alliances | 5.35 | - | 5.35 | | Broadening Customer Base and Business Operations | 10.70 | 10.70 | - | | Upgrading IT Infrastructure and Equipment | 2.68 | 2.16 | 0.52 | | Enhancing Event Planning | 16.05 | 16.05 | - | | Working Capital and General Corporate Purposes | 18.72 | 18.72 | - | | Total | 53.50 | 47.63 | 5.87 | - Preliminary discussions with potential targets for growth through mergers and acquisitions have concluded, with no formal agreements entered into[105] Other Information Directors' and Shareholders' Interests As of September 30, 2022, founders and executive directors Mr. Yiu Ka Ho and Mr. Luk Ka Chun, through their jointly controlled Blackpaper BVI, beneficially held 175,500,000 shares, representing 65% of the issued share capital, making them controlling shareholders, further solidifying control via an acting-in-concert deed with certain employees holding 2.5% of shares - Executive Directors Mr. Yiu Ka Ho and Mr. Luk Ka Chun are deemed to have interests in 175,500,000 shares (representing 65.0%) held by Blackpaper BVI[109][110] - Blackpaper BVI, Mr. Yiu, Mr. Luk, and certain employees entered into an acting-in-concert deed to vote in unison on all company matters[110] Corporate Governance and Compliance During the reporting period, the company complied with the Corporate Governance Code in Appendix 14 of the Listing Rules, adopted a standard code for directors' securities transactions, confirmed by all directors, and the audit committee reviewed the unaudited condensed consolidated financial statements, with no share options granted since the 2018 adoption of the share option scheme, and no purchase, sale, or redemption of any listed securities during the period - The company has consistently complied with all code provisions of the Corporate Governance Code during the reporting period[128] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period[130] - No share options have been granted, exercised, lapsed, or cancelled since the adoption of the share option scheme[121] - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[123]