Financial Performance - The Group reported revenue of approximately HK$79.2 million for the six months ended June 30, 2023, a decrease of 21.1% from HK$100.4 million in the same period last year[9]. - Gross profit fell by 65.5% to approximately HK$4.9 million, with a gross profit margin decreasing from 14.2% to 6.2%[9]. - Operating expenses increased by 17.6% to approximately HK$14.7 million, up from HK$12.5 million in the previous year[10]. - The Group recorded a loss of approximately HK$7.9 million from continuing operations, compared to a profit of approximately HK$1.4 million in the corresponding period[11]. - Basic loss per share was 1.9 HK cents for the Reporting Period, a decline from earnings per share of 92.4 HK cents in the previous year[15]. - The overall loss attributable to equity holders of the Company was approximately HK$7.9 million, compared to a profit of approximately HK$439.8 million in the same period last year[15]. - The company recorded a loss attributable to equity holders of approximately HK$7,900,000 during the reporting period, compared to a profit of approximately HK$439,800,000 in the same period last year[18]. - The basic loss per share for the reporting period was HK$0.019, a significant decrease from the basic earnings per share of HK$0.924 in 2022[18]. - Revenue for the first half of 2023 decreased to approximately HK$77.0 million, down 20.5% from HK$96.8 million in the corresponding period[32]. - Gross profit fell by 75.8% to approximately HK$2.9 million compared to HK$12.0 million in the previous year[32]. - Operating loss for the first half of 2023 was approximately HK$4.7 million, a significant decline from an operating profit of approximately HK$5.2 million in the same period last year[32]. - The report does not present segment assets and liabilities as they are not regularly reported to the Group's chief operating decision-makers[111]. - For the six months ended June 30, 2023, total revenue was HK$79,205,000, a decrease of 21.1% from HK$100,379,000 for the same period in 2022[115]. - Gross profit for the same period was HK$4,905,000, with a gross profit margin of 6.2%, compared to HK$14,255,000 and a margin of 14.2% in 2022[115]. - Operating loss for the six months ended June 30, 2023, was HK$9,760,000, resulting in an operating loss margin of 12.3%[115]. - Other income decreased to HK$1,855,000 in 2023 from HK$4,206,000 in 2022, primarily due to the absence of government subsidies[123]. - The company reported a loss before taxation of HK$7,935,000 for the six months ended June 30, 2023, compared to a profit of HK$1,322,000 in 2022[115][128]. - The effective tax rate remained at 16.5% for Hong Kong profits tax for both periods[129]. - For the six months ended June 30, 2023, the Group reported a loss attributable to equity holders of HK$7,916,000, compared to a profit of HK$439,776,000 for the same period in 2022[135]. - Basic loss per share for continuing operations was HK(1.9) cents, a decrease from HK(0.3) cents in 2022[135]. - The diluted loss per share for continuing operations was HK(1.6) cents, down from HK(0.3) cents in 2022[138]. Discontinued Operations - The discontinued operations, which included the disposal of the property and facility management business in Hong Kong, did not generate any transactions during the Reporting Period[14]. - The Group recognized a significant disposal gain of approximately HK$438.4 million in the corresponding period from the sale of the PFM HK Business[14]. - The loss for the period from discontinued operations was HK$7,916,000, compared to a profit of HK$392,576,000 in 2022[135]. - The profit from discontinued operations for the period from January 1, 2022, to January 10, 2022, was HK$438,440,000[192]. - Net cash inflows from investing activities for discontinued operations amounted to HK$529,197,000 during the same period[192]. Legal Matters - The company and its subsidiary received a writ of summons requiring a deposit of HK$58,880,000 related to a surety bond, which must be deposited within 7 days into a designated account[21]. - The court granted summary judgment in favor of the plaintiff, requiring the company to deposit the aforementioned amount, which will not materially impact the group's liquidity position[21]. - Another writ of summons was issued requiring a deposit of HK$3,740,000, which also must be deposited within 7 days into a designated account[24]. - The company is involved in ongoing legal proceedings related to claims for additional works performed, amounting to approximately HK$98.5 million[25]. - The company considers the recent legal judgments to be in the best interest of its shareholders and does not anticipate incurring additional liabilities beyond those already disclosed[21]. - The company is involved in litigation regarding a surety bond, with claims amounting to approximately HK$54.4 million against the company and its subsidiary ISP Construction (Engineering) Limited[168]. - A writ of summons was issued for a deposit of HK$58,880,000 to be held until the company's liability under the surety bond is released, with a court judgment favoring the company on April 21, 2023[170]. - The company and ISP Curtain Wall and Aluminum Products Limited are required to deposit HK$3,740,000 related to another surety bond case, which will not materially impact the group's liquidity[173]. - A separate writ of summons was filed against ATAL Engineering Limited for an outstanding amount of approximately HK$98.5 million for additional works performed by ISP Construction (Engineering) Limited[174]. - The company is required to deposit HK$3,740,000 as a performance bond until the obligations under the bond are released[175]. - The company is pursuing a claim against Anle Engineering for approximately HK$98,500,000 related to additional works and expenses incurred[176]. - No provisions or contingent liabilities were recognized as of June 30, 2023, as the directors believe the possibility of an outflow of resources is remote[178]. Cash Flow and Liquidity - The company reported a net cash used in operating activities of HK$11,221,000 for the six months ended June 30, 2023, an improvement from HK$12,843,000 in the same period of 2022[90]. - Cash flow from investing activities showed a net cash used of HK$62,320,000, a significant decrease from a net cash generated of HK$462,479,000 in the prior year[90]. - The company had cash and cash equivalents of HK$77,887,000 at the end of the period, down from HK$242,522,000 at the end of the previous period[90]. - The company maintained a prudent liquidity risk management strategy, ensuring sufficient bank balances and cash to meet its liabilities[104]. - The company reported a cash outflow of HK$1,135,000 in financing activities, a decrease from HK$299,108,000 in the previous year, primarily due to lower dividend payments[90]. - The company incurred a cash loss of HK$74,676,000 during the period, contrasting with a cash increase of HK$150,528,000 in the same period of the previous year[90]. - The company’s total cash flow forecast is monitored by the corporate finance team to ensure adequate liquidity for operations[104]. - The company has ongoing claims over its contract assets and receivables due to disputes with main contractors, with management confident in the recoverability of these balances[107]. Business Outlook and Strategy - The decrease in revenue was attributed to a lack of new orders and disruptions in existing project progress[9]. - The economic outlook for the second half of 2023 remains unstable, with fewer tenders expected for new development projects[41]. - ISP Business plans to focus on the luxury residential sector and rehabilitation of sizable estates, which are less affected by economic downturns[41]. - Directors are confident in considerable business opportunities and growth potential for ISP Business due to enhanced financial resources and a strong industry reputation[42]. - The Group plans to adopt a conservative approach while exploring new business development opportunities to enhance income streams amid economic volatility[47]. - The management expects to undertake more sizable projects in the near future, leveraging its strong financial position and historical track record[48]. - The Group aims to retain top talent by ensuring competitive remuneration and benefits through regular market benchmarking[64]. - The management emphasizes the importance of workplace wellness programs to support employee well-being and work-life balance[64]. - The Group is committed to investing in staff development and resource sharing to foster mutual growth[64]. Assets and Liabilities - The Group's total assets decreased from HK$424.3 million as of December 31, 2022, to HK$389.7 million as of June 30, 2023[57]. - The Group's net assets per share decreased from HK$0.397 to HK$0.379 during the same period[57]. - The current ratio improved from 1.9 to 2.0, indicating better short-term financial stability[57]. - Current assets decreased to HK$386,900,000 from HK$422,138,000 as of December 31, 2022, reflecting a decline of 8.3%[85]. - Total non-current assets increased to HK$2,755,000 from HK$2,176,000, representing a growth of 26.5%[85]. - Total liabilities decreased from HK$223,871,000 to HK$197,772,000, a reduction of 11.7%[85]. - The Company reported a net asset value of HK$191,383,000 as of June 30, 2023, down from HK$200,198,000 at the end of 2022[85]. - The Group's accounts receivable totaled HK$103,198,000 as of June 30, 2023, down from HK$108,462,000 on December 31, 2022, representing a decrease of approximately 4%[152]. - The ageing analysis of accounts receivable shows that HK$3,495,000 is due within 30 days, while HK$27,476,000 is overdue by more than 90 days[152]. - Retention receivables from customers for contract works increased to approximately HK$8,498,000 as of June 30, 2023, up from HK$4,954,000 on December 31, 2022[153]. - Total accounts payable decreased to HK$196,065,000 as of June 30, 2023, from HK$222,699,000 on December 31, 2022, indicating a reduction of about 12%[163]. - Retention payables related to contracting business were approximately HK$65,347,000 as of June 30, 2023, slightly down from HK$65,601,000 on December 31, 2022[164]. - The maximum exposure to credit risk at the reporting date is the carrying value of the receivables, with no collateral held as security[155]. - The credit period for accounts receivable remains consistent at 30 to 60 days as of both June 30, 2023, and December 31, 2022[151]. - The Group expects to recover or settle all retention receivables within one year, with a portion expected to be settled in more than 12 months[153]. Staff and Human Resources - As of June 30, 2023, the Group employed a total of 314 staff, a slight decrease from 317 staff as of December 31, 2022[63]. - The Hong Kong economy and job market have shown a slight recovery since the second half of 2022, impacting the Group's human resources strategy positively[64]. - Key management personnel compensation for the six months ended June 30, 2023, was HK$2,081,000, a decrease from HK$2,231,000 in 2022[180]. - Staff costs, including directors' emoluments, amounted to HK$25,188,000, a decrease from HK$30,453,000 in the previous year[128]. - Service charges paid to a company controlled by a director amounted to HK$230,000, compared to HK$15,000 in the previous year[184]. - Contracting work's income from a company with a common controlling shareholder was HK$1,780,000, up from HK$972,000 in 2022[184].
昇柏控股(02340) - 2023 - 中期财报