Financial Performance - The Group's total revenue for the year ended March 31, 2023, was approximately HK$786.2 million, an increase of approximately 28.1% compared to HK$613.6 million for the previous year[13]. - The gross profit for the Group was HK$24.2 million, reflecting an increase of approximately 24.7% from HK$19.4 million in the prior year[13]. - The Group's revenue for the Review Year reached approximately HK$786.2 million, an increase of 28.1% compared to the previous year[31]. - The Group's gross profit increased by approximately HK$4.8 million, or approximately 24.7%, reaching approximately HK$24.2 million[41]. - The gross profit margin for the Review Year was approximately 3.1%, slightly down from 3.2% in the previous year[41]. - Net profit for the Review Year was approximately HK$7.9 million, compared to approximately HK$7.4 million from Last Year, with a net profit margin of approximately 1.0%[50]. - Other gains, net amounted to approximately HK$7.1 million, an increase from approximately HK$1.8 million, primarily due to government grants and subsidies of approximately HK$7.8 million recognized for the Review Year[46]. - Direct costs increased by approximately HK$167.8 million, or approximately 28.2%, reaching approximately HK$762.0 million for the Review Year[40]. - Administrative expenses increased by approximately HK$3.0 million or about 15.8% to approximately HK$22.0 million, mainly due to an increase in staff costs of approximately HK$2.3 million[47]. - Income tax expense increased by approximately HK$6.5 million or about 120.4%, resulting in an income tax expense of approximately HK$1.1 million[49]. - Net profit margin decreased slightly from approximately 1.2% to approximately 1.0% due to a lower gross profit margin[66]. Market Conditions - Hong Kong's real GDP contracted by 3.5% throughout 2022 due to the impact of COVID-19 and external economic conditions[10]. - The construction industry in Hong Kong faced significant challenges, including project delays and increased costs due to local COVID-19 restrictions[11]. - The lifting of COVID-19 restrictions in 2023 is expected to boost business sentiment and recovery in the construction industry[12]. - The Hong Kong government's 2023–24 budget presents promising opportunities for new projects in the construction market[18]. - The Northern Metropolis plan and various residential and commercial sites indicate a booming potential for new projects in the construction market[18]. - A survey indicated that 11% of large enterprises in the construction industry expressed optimism for business conditions in Q1 2023, while 18% anticipated a worsening outlook[25]. Challenges and Risks - The Group faces challenges such as rising fuel and construction material costs, a shortage of skilled labor, and strong competition[18]. - The Group's operations may face uncertainties due to unexpected geological or sub-soil conditions, potentially leading to increased project complexity and additional costs[75]. - Damage to underground service utilities during foundation works may result in repair costs that are not covered by insurance, impacting financial stability[82]. - Revenue is primarily derived from non-recurrent projects, with no guarantee of securing new contracts, which may significantly affect future business prospects[83]. - The number and scale of projects from which the Group derives revenue may vary significantly, making future business volume difficult to forecast[86]. - The Group may incur additional costs due to unforeseen geological conditions, which could lead to cost overruns and adversely affect financial position[76]. Corporate Governance and Management - The Group is committed to maintaining good corporate governance to safeguard shareholder interests and maximize shareholder value[191]. - The Company has adopted the corporate governance code contained in Appendix 14 to the Listing Rules, ensuring compliance with all code provisions from the Listing Date to March 31, 2023[192][193]. - The Board consists of five members, including two executive Directors and three independent non-executive Directors, ensuring a balanced composition[198]. - Mr. Yip serves as both Chairman and Chief Executive Officer, a decision made for effective management and business development[192]. - The Company has adopted the Model Code for Securities Transactions by Directors, with all Directors confirming compliance since the Listing Date[197]. Employee and Remuneration - The total staff cost incurred by the Group for the review year was approximately HK$157.8 million, compared to approximately HK$96.2 million in the previous year, reflecting an increase of about 64%[138]. - The Group employed a total of 304 full-time employees as of March 31, 2023, up from 205 full-time employees as of March 31, 2022, indicating a growth of approximately 48% in workforce size[138]. - The Group provides comprehensive remuneration packages to attract and retain skilled employees, including salary, discretionary bonuses, and cash subsidies[101]. - The Group's remuneration packages include salaries, discretionary bonuses, and other cash subsidies, with an annual review system in place for performance assessment[138]. Financial Position and Funding - The Group plans to seek external funding for long-term debt to facilitate geographic expansion beyond the Hong Kong market[34]. - The Group had total cash, bank balances, and pledged deposits of approximately HK$96.3 million as of March 31, 2023, down from approximately HK$120.4 million as of March 31, 2022[108]. - The net proceeds received by the Group were approximately HK$91.9 million, intended for enhancing construction machinery, strengthening workforce, reinforcing sales efforts, and funding general working capital[128]. - The actual application of the net proceeds has been in accordance with the intentions disclosed in the Prospectus, with no material changes in the use of proceeds[135]. - The unutilized proceeds are currently placed in interest-bearing deposits with authorized financial institutions in Hong Kong[134]. - As of March 31, 2023, the total amount utilized was HK$90.4 million, leaving an unutilized balance of HK$1.5 million, which is expected to be fully utilized by December 31, 2023[130]. Environmental Management - As of March 31, 2023, the Group has 127 machines regulated under the NRMM Regulation, with plans to acquire more environmentally friendly equipment[91]. - The Group has established an environmental management system compliant with ISO 14001:2015 standards to minimize adverse environmental impacts[90]. - Compliance with environmental protection laws is critical, as operations may result in air and noise pollution, effluent discharge, and construction waste disposal[88].
龙昇集团控股(06829) - 2023 - 年度财报