Financial Performance - Revenue for the year ended December 31, 2023, was HKD 672.7 million, a decrease of 2.0% from HKD 686.7 million for the year ended December 31, 2022[4]. - Retail business revenue decreased by 2.6% to HKD 503.8 million, with a total of 111 retail stores operating in Hong Kong as of December 31, 2023[4]. - Gross profit for 2023 was HKD 393.5 million, down 3.0% from HKD 405.6 million in 2022, resulting in a gross margin of 58.5%, a decline of 0.6 percentage points from 59.1%[4]. - The company reported a loss attributable to shareholders of HKD 34.6 million for 2023, compared to a profit of HKD 5.3 million in 2022[4]. - Basic and diluted loss per share for 2023 was HKD 5.28, compared to earnings of HKD 0.80 per share in 2022[6]. - The group recorded a loss of HKD 42,616,000 for the year ended December 31, 2023, compared to a loss of HKD 4,128,000 in 2022[14]. - The company reported a net loss of HKD 42,616,000 for the year, compared to a loss of HKD 4,128,000 in the previous year, indicating a significant decline in profitability[24]. - The group reported a loss attributable to owners of HKD 34,600,000 for the year ended December 31, 2023, compared to a profit of HKD 5,300,000 in 2022, resulting in a loss per share of HKD 0.0528[74]. Assets and Liabilities - Total assets as of December 31, 2023, were HKD 713.8 million, down from HKD 759.8 million in 2022[8]. - Total liabilities increased slightly to HKD 457.9 million in 2023 from HKD 453.1 million in 2022[9]. - As of December 31, 2023, the group's current liabilities exceeded current assets by HKD 140,956,000, compared to HKD 107,100,000 as of December 31, 2022[14]. - The group's current liabilities exceeded current assets by HKD 141,000,000 as of December 31, 2023, compared to HKD 107,100,000 in 2022, with a current ratio of 1.04 down from 1.28 in 2022[77]. - Cash and cash equivalents decreased to HKD 88.5 million in 2023 from HKD 103.9 million in 2022[8]. - The total trade receivables as of December 31, 2023, were HKD 56,776, down from HKD 59,324 in 2022, reflecting a decrease of 4.2%[43]. - Trade payables decreased to HKD 37.9 million in 2023 from HKD 41.1 million in 2022[13]. Accounting and Financial Policies - The group adopted several new accounting standards effective from January 1, 2023, but these did not have a significant impact on its performance or financial position[15]. - The group adjusted its accounting policy regarding long service payments due to changes in local legislation, impacting the recognition of past service costs[21]. - The adjustments for the year ended December 31, 2022, included a reclassification of costs, resulting in a revised net loss of HKD 4,128,000[21]. - The total liabilities included an increase in employee benefit obligations of HKD 3,348,000 due to the revised accounting policy[21]. - The group reported a decrease in reserves by HKD 1,943,000 as a result of the accounting policy change[21]. - The group’s deferred tax assets increased by HKD 435,000 following the adjustments made[21]. - The deferred tax assets increased to HKD 8,589,000 as of December 31, 2023, from HKD 7,645,000 in the previous year[25]. Operational Highlights - The company plans to continue focusing on retail and wholesale distribution of bottled beverages and herbal products in Hong Kong and mainland China[10]. - The company launched new product lines targeting pregnant women and postpartum recovery, including various health food sets[52]. - The company has optimized its store network by closing underperforming locations, maintaining 111 self-operated stores in Hong Kong[52]. - The company plans to open approximately two new retail stores in 2024 while closing underperforming locations[62]. - The company aims to enhance its product offerings by launching new products, including a festive series and postpartum care products in 2024[63]. - The company will continue to adopt rPET materials for packaging to fulfill its environmental commitments[64]. - The company is focusing on expanding its online sales and leveraging social media for product promotion[65]. Cost Management - Employee benefits expenses, including director remuneration, increased to HKD 212,192 in 2023, up 6.4% from HKD 199,060 in 2022[33]. - The group's total sales cost for the year ended December 31, 2023, was HKD 279,200,000, a decrease of 0.7% from HKD 281,100,000 in 2022, with the sales cost as a percentage of revenue rising to 41.5% from 40.9% due to increased raw material costs, wages, and utilities[69]. - Employee costs increased by 6.6% to HKD 212,200,000 for the year ended December 31, 2023, compared to HKD 199,100,000 in 2022, with the employee cost to revenue ratio rising to 31.5% from 29.0%[71]. - Rental expenses for the group's Hong Kong retail stores increased by 7.6% to HKD 104,700,000 for the year ended December 31, 2023, compared to HKD 97,300,000 in 2022, with the rental expense to revenue ratio at 20.8% versus 18.8% in 2022[72]. Future Outlook - The management emphasizes a cautious approach due to the uncertain business environment, aiming to optimize costs and maintain stable cash flow[61]. - The company has begun evaluating the impact of upcoming accounting standard revisions, which are not expected to have a significant effect on the group in the foreseeable future[17]. - The auditor, PwC, confirmed that the preliminary performance announcement aligns with the audited consolidated financial statements for the year ending December 31, 2023[91]. - The annual report containing all relevant information as per listing rules will be published on the designated websites at an appropriate time[92].
鸿福堂(01446) - 2023 - 年度业绩