Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 24,422,000, representing a 18.5% increase from HKD 20,623,000 in the same period of 2022[7] - Gross profit increased to HKD 17,679,000, up 26.3% from HKD 13,999,000 year-on-year[7] - Operating loss narrowed to HKD 3,366,000 compared to a loss of HKD 5,172,000 in the previous year, indicating improved operational efficiency[7] - Loss attributable to shareholders for the period was HKD 3,634,000, a reduction of 34.4% from HKD 5,533,000 in the prior year[7] - Total comprehensive loss for the period was HKD 3,781,000, down from HKD 5,832,000 in the same period last year[8] - Basic and diluted loss per share improved to HKD 0.19 from HKD 0.28 year-on-year[8] - The group reported a net loss of approximately HKD 3,600,000, an improvement from a net loss of HKD 5,500,000 in the previous year[48] Assets and Liabilities - Non-current assets decreased to HKD 2,121,000 from HKD 2,190,000 as of March 31, 2023[9] - Current assets decreased to HKD 23,869,000 from HKD 29,313,000, primarily due to a reduction in cash and bank balances[9] - Total liabilities decreased to HKD 10,739,000 from HKD 10,961,000, reflecting improved financial management[10] - The company's equity decreased to HKD 8,784,000 from HKD 12,565,000, indicating a decline in net asset value[10] - The company’s cash and cash equivalents at the end of the period were HKD 18,861,000, down from HKD 28,299,000 at the end of the previous year[13] Cash Flow - The net cash used in operating activities for the six months ended September 30, 2023, was HKD (4,647,000), compared to HKD (2,324,000) for the same period in 2022, indicating a significant increase in cash outflow[13] - Cash and cash equivalents decreased by HKD 5,653,000 during the six months ended September 30, 2023, compared to a decrease of HKD 3,295,000 in the prior year[13] Revenue Sources - The restaurant business in Hong Kong generated revenue of approximately HKD 24,400,000, an increase of about HKD 3,800,000 compared to the previous year[56] - The group recognized rental income of HKD 2,160,000 from Hongli Development Limited during the interim period, an increase from HKD 1,560,000 in the same period of 2022, representing a growth of 38.5%[41] Expenses - Employee costs totaled approximately HKD 11,500,000, an increase of about HKD 900,000 due to labor shortages in the catering industry[51] - The company reported a sales cost of HKD 6,743,000 for the six months ended September 30, 2023, slightly up from HKD 6,624,000 in the same period last year[28] - Depreciation expenses for property, plant, and equipment were HKD 98,000 for the six months ended September 30, 2023, down from HKD 1,780,000 in the previous year[28] - The group's other income and losses amounted to approximately HKD 400,000, significantly lower than the previous year's HKD 1,400,000, mainly due to the absence of government subsidies received last year[50] Shareholder Information - Major shareholders include Golden Toy with 172,869,780 shares (8.88%) and Kong Fai with 1,277,168,061 shares (65.62%), collectively holding 74.50% of the issued share capital[72] - The total number of shares held by directors and major executives includes 1,450,037,841 shares held in trust, representing 74.50% of the issued share capital[70] - No additional interests or short positions in the company's shares were reported by directors or major executives as of September 30, 2023[71] Stock Options - As of September 30, 2023, the company has not granted any stock options under the 2020 plan, with 194,631,410 stock options available for grant, representing 10% of the issued shares[69] - The company has 26,000,000 unexercised stock options under the 2010 plan, accounting for approximately 1.3% of the issued shares as of September 30, 2023[69] - The estimated fair value of the stock options granted on October 23, 2017, was HKD 2,906,000, with 30% vesting immediately and the remaining 70% vesting over the next two years[69] - No share options were granted or exercised during the interim period, consistent with the previous period[39] Corporate Governance - The company has adopted the corporate governance code as per the Stock Exchange Listing Rules Appendix 14, ensuring compliance except for specific provisions regarding the separation of roles between the Chairman and CEO[76] - The Audit Committee consists of three independent non-executive directors, with the Chairman being Mr. Hong Zhi Yuan, overseeing internal controls and financial reporting matters for the six months ending September 30, 2023[77] - The Remuneration Committee has been established to recommend policies regarding the remuneration of directors and senior management, consisting of three independent non-executive directors[78] - The Nomination Committee, chaired by Mr. Zheng He Hui, reviews the board's structure and diversity at least annually, aligning with the company's business needs and future development[79] - All directors confirmed compliance with the standards for securities trading as per the Listing Rules Appendix 10 for the six months ending September 30, 2023[80] Dividend Policy - The company did not recommend the distribution of an interim dividend for the period ended September 30, 2023, consistent with the previous year[28] - The board has decided not to declare any interim dividend for the six months ended September 30, 2023[63] Market Outlook - The outlook for the restaurant business remains challenging due to high interest rates, tightening financing conditions, and labor shortages[65]
环科国际(00657) - 2024 - 中期财报