Financial Performance - For the three months ended June 30, 2023, revenue from goods and services was HKD 8,233,000, a decrease of 10.8% compared to HKD 9,233,000 in the same period of 2022[5] - The company reported a loss before tax of HKD 1,681,000 for the three months ended June 30, 2023, compared to a loss of HKD 840,000 in the same period of 2022[5] - Total comprehensive income for the six months ended June 30, 2023, was HKD 4,078,000, compared to a loss of HKD 1,773,000 in the same period of 2022[5] - The company reported a total revenue of HKD 13,501,000 for the six months ended June 30, 2023, compared to HKD 15,462,000 for the same period in 2022, indicating a decrease of approximately 12.7%[24] - The company reported a loss from continuing operations of HKD 1,681,000 for the three months ended June 30, 2023, compared to a loss of HKD 836,000 for the same period in 2022[31] - For the six months ended June 30, 2023, the loss from continuing operations was HKD 3,173,000, compared to a loss of HKD 1,488,000 in 2022, indicating an increase in losses[36] Revenue Breakdown - Revenue from Hong Kong for the six months ended June 30, 2023, was HKD 7,059,000, up from HKD 6,110,000 in 2022, reflecting an increase of about 15.5%[24] - Revenue from Canada decreased to HKD 6,442,000 for the six months ended June 30, 2023, down from HKD 9,352,000 in 2022, representing a decline of approximately 30.7%[24] - Revenue from the footwear business was approximately HKD 13,500,000 for the six months ended June 30, 2023, down from approximately HKD 15,500,000 in 2022, primarily due to a slowdown in sports apparel trade following the 2022 World Cup[67] - The loan brokerage and credit assessment business saw revenue plummet by 96.8% from approximately HKD 62,000 for the six months ended June 30, 2022, to about HKD 2,000 for the same period in 2023, due to branch closures and layoffs[68] Costs and Expenses - The cost of goods sold for the same period was HKD 6,234,000, down 29.5% from HKD 8,844,000 year-on-year[5] - The cost of goods sold for the six months ended June 30, 2023, was approximately HKD 9,900,000, compared to HKD 14,500,000 in 2022[69] - The total employee costs for the six months ended June 30, 2023, amounted to HKD 2,771,000, compared to HKD 744,000 in 2022, reflecting a substantial increase[31] - Employee benefits expenses increased from approximately HKD 700,000 for the six months ended June 30, 2022, to approximately HKD 2,800,000 for the six months ended June 30, 2023, primarily due to increased hiring in the retail business at the end of 2022[71] - Other operating expenses rose from approximately HKD 1,400,000 for the six months ended June 30, 2022, to approximately HKD 3,200,000 for the six months ended June 30, 2023, mainly due to retail operations in Hong Kong[72] Assets and Liabilities - The net asset value increased to HKD 5,341,000 as of June 30, 2023, from HKD 1,235,000 at the end of 2022[6] - The company’s inventory decreased to HKD 14,319,000 from HKD 17,184,000 year-on-year, reflecting a reduction of 16.5%[6] - Trade receivables increased significantly to HKD 13,523,000 from HKD 6,455,000, marking a rise of 109.5%[6] - The company’s cash and cash equivalents increased by HKD 621,000 to HKD 2,624,000 as of June 30, 2023, compared to HKD 5,668,000 at the end of the previous year[11] - Total borrowings as of June 30, 2023, amounted to approximately HKD 19,200,000, up from approximately HKD 14,500,000 as of December 31, 2022[77] - The debt-to-asset ratio increased to 56.1% as of June 30, 2023, compared to 49.0% as of December 31, 2022[77] Financing and Capital - The company incurred financing costs of HKD 410,000 for the three months ended June 30, 2023, compared to HKD 160,000 in the same period of 2022, an increase of 156.3%[5] - Financing costs increased by 141.6% from approximately HKD 320,000 for the six months ended June 30, 2022, to approximately HKD 773,000 for the six months ended June 30, 2023, due to interest expenses on a loan of HKD 16,500,000 obtained during the period[73] - The company completed a share consolidation on March 21, 2023, converting 722,304,000 existing shares into 36,115,200 consolidated shares[9] - The company raised approximately HKD 10,264,000 from the placement of 100,320,000 shares at a price of HKD 0.107 per share, resulting in an increase in share capital of about HKD 1,003,000 and share premium of approximately HKD 9,731,000 after deducting transaction costs of about HKD 470,000[10] - The company plans to conduct a rights issue, offering two (2) shares for every one (1) existing share at a subscription price of HKD 0.2 per share, aiming to raise approximately HKD 14,400,000 before expenses[112] Strategic Focus and Operations - The company plans to continue expanding its footwear and apparel business in China, reflecting a strategic focus on growth in this market[13] - The company has terminated its loan brokerage and credit assessment service segment during the reporting period[19] - The company completed the sale of its loan brokerage and credit assessment services business for a total consideration of HKD 1, allowing it to focus on its continuing operations[33] - The management remains cautious about the market conditions and will adjust strategies as necessary due to ongoing financial constraints, inflation, and high interest rates[62] - The company plans to maintain and strengthen its position in the industry while exploring suitable business opportunities and seeking collaborations with local and overseas enterprises[62] Shareholder Information - The company did not declare any interim dividends for the six months ended June 30, 2023, consistent with the previous year[35] - The company did not recommend any interim dividend for the six months ended June 30, 2023, compared to zero for the same period in 2022[76] - The company’s directors and senior management held a total of 6,750 shares, representing approximately 0.02% of the company’s total shares[101] - The rights issue was approved by shareholders at a special general meeting on July 27, 2023[113] Other Information - The audit committee reviewed the interim results for the six months ended June 30, 2023, and found the financial statements to be prepared in accordance with applicable accounting standards[108] - As of June 30, 2023, the company had no significant post-reporting date events[110] - The unaudited interim results announcement for the six months ending June 30, 2023, has been published on the Hong Kong Stock Exchange and the company's website[115]
积木集团(08187) - 2023 - 中期财报