奥思集团(01161) - 2023 - 中期业绩

Announcement Cover and Disclaimer Disclaimer Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited disclaim responsibility for this announcement's content, accuracy, or completeness, and any resulting losses - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the content of this announcement, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss[4] Interim Results Announcement Company Announcement Overview A.S. Watson Group Limited announces unaudited interim results for the six months ended March 31, 2023, showing significant growth driven by beauty services recovery - A.S. Watson Group Limited announces its unaudited consolidated results for the six months ended March 31, 2023[5][10] - The condensed consolidated financial statements have been reviewed by the independent auditor, confirming compliance with Hong Kong Accounting Standard 34[10] Financial Highlights Group revenue increased by 26.7% to approximately HK$492 million, profit surged 116.3% to HK$57.1 million, and gross profit margin rose to 89.4%, with an interim dividend of HK7.0 cents per share declared 2023 H1 Key Financial Data Summary | Metric | Six Months Ended March 31, 2023 (HK$'000) | Six Months Ended March 31, 2022 (HK$'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 492,000 | 388,300 | +26.7% | | Profit for the Period | 57,100 | 26,400 | +116.3% | | Gross Profit Margin | 89.4% | 84.9% | +4.5pp | | Advertising Expenses | Increased 76.3% | | | | Staff Costs | Increased 39.3% | | | - The increase in revenue was primarily due to the lifting of COVID-19 restrictions and the full six-month contribution from the beauty services business, which was affected by the pandemic in the prior year[6] - The decrease in product revenue was mainly due to the large-scale outbreak of COVID-19 in China at the end of 2022, severely impacting supply chains and consumer spending[6] - The Board of Directors declared an interim dividend of HK7.0 cents per share[8] Operating Highlights The Group expanded its beauty services, operating 54 beauty centers in Hong Kong, 2 in Macau, and 4 in mainland China, opening flagship stores and optimizing its product sales network - As of March 31, 2023, the Group operated 54 beauty centers in Hong Kong, 2 in Macau, and 4 in China[8] - The Causeway Bay Goldin Financial Centre A.S. Watson Medical Beauty Centre flagship store opened in October 2022, occupying over 7,000 square feet[8] - In China, the Group opened its fourth self-operated Watermill House in Beijing in October 2022[8] - As of March 31, 2023, the Group operated 10 retail stores in Hong Kong, 5 in Macau, and 1 in China[8] Outlook The Group invested heavily in flagship stores to enhance synergy and customer satisfaction, and is optimistic about second-half performance given improving Hong Kong consumer confidence and rising tourist arrivals - The Group has undertaken several projects, including opening and renovating large flagship stores, concentrating key brands to create greater operational synergy[8] - With continuously improving consumer confidence in Hong Kong and a gradual increase in tourist arrivals, the Group is confident that the economy and consumer sentiment are progressively recovering[8] - Leveraging its strong financial background, loyal customer base, and good reputation, the Group is confident in achieving positive results in the second half of the year[8] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended March 31, 2023, Group revenue reached HK$492 million, a 26.7% year-on-year increase, with profit for the period surging 116.3% to HK$57.066 million Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended March 31) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 491,957 | 388,347 | +26.7% | | Purchases and changes in inventories of finished goods | (52,026) | (58,522) | -11.1% | | Other income | 4,664 | 8,678 | -46.3% | | Other gains or losses | (981) | (2,272) | -56.8% | | Staff costs | (211,466) | (151,773) | +39.3% | | Depreciation | (80,439) | (80,622) | -0.2% | | Finance costs | (4,002) | (3,057) | +30.9% | | Other expenses | (74,854) | (63,042) | +18.7% | | Profit before tax | 72,853 | 37,737 | +93.1% | | Tax | (15,787) | (11,356) | +39.0% | | Profit for the period | 57,066 | 26,381 | +116.3% | | Profit attributable to owners of the Company | 57,211 | 26,588 | +115.9% | | Non-controlling interests | (145) | (207) | -29.9% | | Basic and diluted earnings per share | 8.4 HK cents | 3.9 HK cents | +115.4% | Other Comprehensive Income (Six Months Ended March 31) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Exchange differences arising on translation of foreign operations | 2,557 | 2,313 | | Total comprehensive income for the period | 59,623 | 28,694 | | Total comprehensive income attributable to owners of the Company | 59,768 | 28,912 | | Total comprehensive income attributable to non-controlling interests | (145) | (218) | Condensed Consolidated Statement of Financial Position As of March 31, 2023, total assets less current liabilities were HK$508 million, total equity increased to HK$311 million, and net current liabilities improved to HK$323 million Condensed Consolidated Statement of Financial Position (As of March 31) | Metric | March 31, 2023 (HK$'000) | September 30, 2022 (HK$'000) | | :--- | :--- | :--- | | Non-current assets | | | | Intangible assets | 75,076 | 75,424 | | Goodwill | 29,673 | 29,673 | | Investment properties | 225,954 | 226,068 | | Property and equipment | 124,856 | 130,487 | | Right-of-use assets | 335,327 | 343,014 | | Rental deposits | 35,055 | 37,922 | | Deferred tax assets | 5,117 | 5,651 | | Current assets | | | | Inventories | 55,519 | 72,293 | | Trade receivables | 18,681 | 18,016 | | Contract costs | 43,277 | 43,241 | | Bank balances and cash | 243,356 | 234,284 | | Current liabilities | | | | Trade payables | 1,933 | 2,103 | | Contract liabilities | 499,653 | 490,197 | | Tax payable | 5,195 | 39,916 | | Total equity | 310,560 | 301,978 | | Net current liabilities | (323,494) | (338,288) | | Total assets less current liabilities | 507,564 | 509,951 | Notes to the Condensed Consolidated Financial Statements 1. Basis of Preparation and Principal Accounting Policies The condensed consolidated financial statements are prepared under HKAS 34 and Listing Rules Appendix 16, reviewed by an independent auditor, with no significant impact from new HKFRS amendments - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of Appendix 16 to the Listing Rules[17] - The condensed consolidated financial statements are unaudited but have been reviewed by BDO Limited[17] - The application of amendments to Hong Kong Financial Reporting Standards in this interim period had no significant impact on the amounts and disclosures presented in the condensed consolidated financial statements[28] 2. Revenue and Segment Information The Group's business comprises product and service segments; service revenue significantly grew to HK$408 million, while product revenue decreased to HK$84.154 million, with Hong Kong and Macau contributing most revenue - The Group's business is divided into product segment (skincare product sales) and service segment (beauty treatment services, spa services, and medical beauty center services)[21] Revenue Recognition Timing and Segment (Six Months Ended March 31) | Segment | Revenue Recognition Timing | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | :--- | | Product Segment | At a point in time | 84,154 | 102,405 | | Service Segment | Over time | 407,803 | 285,942 | | Total | | 491,957 | 388,347 | Geographical Revenue Information (Six Months Ended March 31) | Region | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Hong Kong and Macau | 451,015 | 330,974 | | China | 40,942 | 57,373 | | Total | 491,957 | 388,347 | Segment Results (Six Months Ended March 31) | Segment | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Product Segment Results | 10,860 | 9,575 | | Service Segment Results | 108,780 | 76,462 | | Total Segment Results | 119,640 | 86,037 | 3. Tax Hong Kong profits tax is tiered at 8.25% and 16.5%, China's corporate income tax is 25%, and tax expense for the period was HK$15.787 million - Hong Kong profits tax is calculated under a two-tiered profits tax rate regime, with the first HK$2 million of assessable profits taxed at 8.25% and the remainder at 16.5%[23][44] - China corporate income tax is calculated at the statutory rate of 25%[36] Tax Expense (Six Months Ended March 31) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Current tax | 20,543 | 10,485 | | Deferred tax | (4,756) | 871 | | Total tax | 15,787 | 11,356 | 4. Profit for the Period Profit for the period was HK$57.066 million, a significant increase from the prior year, after various deductions and inclusions Components of Profit for the Period (Six Months Ended March 31) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Amortisation of contract costs | 42,748 | 29,914 | | Loss on fair value change of investment properties | 114 | 2,129 | | Fair value loss on financial assets at fair value through profit or loss | 33 | 149 | | Loss on disposal/write-off of property and equipment | 660 | 123 | | Depreciation: property and equipment | 22,713 | 18,040 | | Depreciation: right-of-use assets | 57,726 | 62,582 | | Net exchange loss | 284 | – | | Interest income from bank deposits | 1,897 | 706 | | Government grants | 72 | 45 | | Rental income from investment properties | 1,745 | 1,712 | | COVID-19 related rent concessions | – | 5,341 | 5. Earnings Per Share Basic and diluted earnings per share for the six months ended March 31, 2023, were HK8.4 cents, a 115.4% increase from HK3.9 cents in the prior year Earnings Per Share Calculation (Six Months Ended March 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted earnings per share (HK$'000) | 57,211 | 26,588 | | Weighted average number of ordinary shares for the purpose of calculating basic and diluted earnings per share | 680,552,764 | 680,552,764 | | Basic and diluted earnings per share | 8.4 HK cents | 3.9 HK cents | 6. Dividends The Board declared an interim dividend of HK7.0 cents per share for the six months ended March 31, 2023, payable on July 3, 2023 - The Board of Directors has declared an interim dividend of HK7.0 cents per share for the six months ended March 31, 2023[48][52] - The dividend will be dispatched to shareholders on July 3, 2023[81] Dividend Declaration (Six Months Ended March 31) | Dividend Type | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Interim dividend of HK7.0 cents per share declared after the end of the reporting period | 47,639 | – | 7. Trade Receivables As of March 31, 2023, total trade receivables were HK$18.681 million, with most receivables aged within 30 days - The Group generally grants credit periods of 30 to 180 days for trade receivables[50] Ageing Analysis of Trade Receivables (As of March 31) | Ageing | March 31, 2023 (HK$'000) | September 30, 2022 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 13,343 | 10,283 | | 31 to 60 days | 1,531 | 1,752 | | 61 to 90 days | 965 | 1,674 | | 91 to 120 days | 1,464 | 1,396 | | 121 to 150 days | 937 | 2,180 | | 151 to 180 days | 391 | 660 | | Over 180 days | 50 | 71 | | Total | 18,681 | 18,016 | 8. Trade Payables As of March 31, 2023, total trade payables were HK$1.933 million, with most payables aged within 30 days Ageing Analysis of Trade Payables (As of March 31) | Ageing | March 31, 2023 (HK$'000) | September 30, 2022 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 1,735 | 1,799 | | 31 to 60 days | 191 | 299 | | Over 60 days | 7 | 5 | | Total | 1,933 | 2,103 | Events After the Reporting Period No significant events occurred after the reporting period - There were no significant subsequent events after the reporting period[64] Management Discussion and Analysis Performance and Dividends Group revenue increased by 26.7% to HK$492 million, profit reached HK$57.1 million, and gross profit margin rose to 89.4%, with an interim dividend of HK7.0 cents per share declared - Group revenue increased by 26.7% year-on-year to approximately HK$492 million[65] - Profit for the period was HK$57.1 million, compared to HK$26.4 million in the prior year[40] - The beauty services business operated for a full six months, with the sales mix adjusting from 73.6% to 82.9% for beauty services and from 26.4% to 17.1% for product sales[42] - The Group's gross profit margin increased from 84.9% in the prior year to 89.4%[42] - The Board resolved to declare an interim dividend of HK7.0 cents per share[52] Beauty Services Business The Group's beauty services brands showed strong double-digit revenue growth, enhancing brand image and customer experience through strategic store expansions and new treatments - Almost all of the Group's beauty services brands performed strongly, recording double-digit revenue growth[71] - The Causeway Bay Goldin Financial Centre A.S. Watson Medical Beauty Centre flagship store opened in October 2022, occupying over 7,000 square feet[54] - The Group continuously acquired advanced high-tech beauty equipment and products, and introduced various new treatments[56] - As of March 31, 2023, the Group operated 54 beauty centers in Hong Kong[57] - In China, the Group opened an additional Watermill House beauty center in Beijing in October 2022, increasing the total to four[59] Product Sales Business Product sales decreased by 17.8% due to China's pandemic impact and H2O+ brand termination, while the Group continues to launch new products and optimize retail store layouts - Product sales decreased by approximately 17.8% year-on-year, mainly due to the COVID-19 outbreak in China impacting supply chains and consumer spending[60] - The Group ceased selling H2O+ brand products after its global distribution was withdrawn in December 2022[60] - All of the Group's beauty brands continue to launch high-quality new products[60] - The HABA counter at SOGO Tsim Sha Tsui, Hong Kong, has relocated to Facesss at Harbour City[75] Liquidity and Financial Resources As of March 31, 2023, cash reserves increased to HK$243.4 million, net current liabilities improved to HK$323.5 million, and the capital gearing ratio remained sound at approximately 0.5% - As of March 31, 2023, the Group's cash reserves were approximately HK$243.4 million[63][99] - As of March 31, 2023, the Group's net current liabilities were approximately HK$323.5 million[90] - The capital gearing ratio was approximately 0.5%, with all borrowings denominated in Hong Kong dollars[91] - The Group maintains prudent cash management, with acceptable foreign exchange fluctuation risks[91] Outlook The Group completed most strategic growth projects, maintaining a strong financial position, and is optimistic about second-half performance as consumer confidence and tourist arrivals recover - The Group's relatively high expenditure strategy over the past year, focused on growth, has largely been completed[99] - The Group's financial position remains strong and robust, with ample cash[99] - With continuously improving consumer confidence in Hong Kong and a gradual increase in tourist arrivals, the Group is confident that the economy and consumer sentiment are progressively moving in the right direction[62] - The Group will consolidate its efforts from the past year and closely monitor the performance of its large stores to formulate future growth strategies[61] Other Information Contingent Liabilities As of March 31, 2023, the Group had no significant contingent liabilities - As of March 31, 2023, the Group had no significant contingent liabilities[79] Capital Commitments As of March 31, 2023, the Group had capital commitments of approximately HK$2.6 million for property and equipment acquisition - As of March 31, 2023, the Group had capital commitments of approximately HK$2,600,000 for the acquisition of property and equipment[103] Employees and Remuneration Policy As of March 31, 2023, the Group employed 1,047 staff, with remuneration policies based on experience, responsibilities, tenure, and market conditions, linked to performance - As of March 31, 2023, the Group employed 1,047 staff[100] - Remuneration policy is determined based on experience, level of responsibility, length of service, and market conditions, with discretionary bonuses linked to the Group's financial performance and individual performance[92] - Other employee benefits include provident funds, insurance and medical coverage, education allowances, and training programs[100] Audit Committee The Audit Committee, chaired by Professor Wong Lung Tak Patrick, reviewed the Group's accounting principles, interim results, and internal controls, and discussed financial reporting with the independent auditor - The Audit Committee members include independent non-executive directors Professor Wong Lung Tak Patrick, Mr. Wong Chun Nam, Dr. Wong Chi Keung, and Dr. Chan Chi Kau, with Professor Wong Lung Tak Patrick as Chairman[94] - The Audit Committee has reviewed the accounting principles and practices adopted by the Group, the unaudited consolidated results for the period, and discussed internal controls and financial reporting matters with the independent auditor[94] Purchase, Sale or Redemption of the Company's Listed Securities During the review period, neither the Company nor its subsidiaries redeemed, purchased, or sold any of its listed shares - During the review period, the Company did not redeem any of its listed shares, nor did the Company or its subsidiaries purchase or sell any such shares[82] Compliance with the Model Code for Securities Transactions The Company adopted the Model Code for Securities Transactions by Directors and all Directors confirmed compliance during the review period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[104] - All Directors confirmed compliance with the Model Code for securities transactions of the Company during the review period[104] Corporate Governance The Directors believe the Company complied with the Corporate Governance Code and adopted a code of conduct for employees with inside information during the review period - The Directors believe that the Company has complied with the Code Provisions of Part 2 of the Corporate Governance Code (where applicable) during the review period[102] - The Company has also adopted a code of conduct for securities transactions by employees who may possess or have access to inside information[84] Interim Dividend and Closure of Register of Members The Board declared an interim dividend of HK7.0 cents per share for shareholders on the register at the close of business on June 15, 2023, with the share register closed from June 14 to June 15, 2023 - The Board has declared an interim dividend of HK7.0 cents per share for the six months ended March 31, 2023[81] - The register of members will be closed from Wednesday, June 14, 2023, to Thursday, June 15, 2023[81] - Dividend warrants will be dispatched to shareholders on Monday, July 3, 2023[81] Publication of Information on HKEX and Company Website This results announcement will be published on the HKEX and Company websites, with the interim report dispatched to shareholders and published on relevant websites in due course - This results announcement will be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company's designated website[86] - The Company's interim report for the six months ended March 31, 2023, will be dispatched to shareholders and published on the respective websites of the Clearing House and the Company in due course[86] Board of Directors The announcement lists the Company's executive directors Mr. Yu Kam Shui, Mr. Tam Siu Kei, Ms. Yu Lai Chu, and Ms. Lai Yin Ping, and independent non-executive directors - The executive directors of the Company are Mr. Yu Kam Shui, Mr. Tam Siu Kei, Ms. Yu Lai Chu, and Ms. Lai Yin Ping[97] - The independent non-executive directors of the Company are Professor Wong Lung Tak Patrick, Mr. Wong Chun Nam, Dr. Wong Chi Keung, and Dr. Chan Chi Kau[97]