STEERS TURNAROUND IN 1H2017
Aug 29, 2017
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HIGHLIGHTS
- Due to a gradual improvement of sales momentum, enhanced gross profit margin and rental savings, the Group achieved a turnaround with net profit of HK$39.1 million (1H2016: net loss of HK$68.6 million);
- Driven by improvements in consumer spending and traffic flow among local shoppers and mainland Chinese visitors, revenue increased by 9.1% to HK$1,827.2 million (1H2016: HK$1,674.9 million);
- Singapore market exhibited a strong growth with its revenue soared 29.4% to HK$173.8 million (1H2016: HK$134.3 million), accounting for 9.5% (1H2016: 8.0%) of total revenue;
- Gross profit margin was lifted by 1.8 percentage points to 26.7% (1H2016: 24.9%); and
- Positive operating leverage was resulted from rental reduction through the Group’s continuous cost control efforts.
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(Hong Kong, August 22, 2017) Emperor Watch & Jewellery Limited (the “Group” or “Emperor W&J”) (Stock code: 887), a leading retailer of European-made watches and fine jewellery, announced its interim results for the six months ended 30 June 2017 (the “Period”).
The overall watch and jewellery retail market saw positive momentum during the Period. The Group’s revenue increased by 9.1%, to HK$1,827.2 million (1H2016: HK$1,674.9 million). Watch segment continued to be a key revenue contributor, and its revenue increased by 9.5% to HK$1,470.3 million (1H2016: HK$1,343.1 million), which accounted for 80.5% (1H2016: 80.2%) of the Group’s revenue. Underpinned by solid demand for jewellery products and a stronger domestic spending, the revenue from jewellery segment increased by 7.6% to HK$356.9 million (1H2016: HK$331.8 million). 73.1% (1H2016: 75.1%) of the Group’s revenue was contributed by the Hong Kong market. Revenue from Singapore market soared 29.4% to HK$173.8 million (1H2016: HK$134.3 million) and accounted for 9.5% (1H2016: 8.0%) of the Group’s revenue.
Driven by an increase in sales, gross profit increased by 16.8% to HK$487.3 million (1H2016: HK$417.1 million). The gross profit margin was lifted by 1.8 percentage points to 26.7% (1H2016: 24.9%), which was mainly attributable to an enhanced sales mix from higher-margin watch collections. Due to a gradual improvement of sales momentum, enhanced gross profit margin and rental savings, the Group recorded a net profit of HK$39.1 million (1H2016: net loss of HK$68.6 million), achieving a turnaround during the Period. Basic earnings per share was HK0.57 cent (1H2016: basic loss per share: HK1.00 cent). Emperor W&J has resolved to declare an interim dividend of HK0.17 cent (1H2016: Nil) per share.
As at 30 June 2017, the Group had 92 stores (31 December 2016: 97) in Hong Kong, Macau, mainland China and Singapore.
Riding on its comprehensive brand mix of watches and strong presence in prime locations, the Group continued to foster a leading position in Hong Kong watch retail market. Inventory level ramped up slightly in response to changes in customer preferences.
During the Period, the Group continued to optimise its retail chain of “Emperor Jewellery” stores in mainland China, to seize the opportunities arising from the rapid growth of the jewellery market. The Group rolled out the “Heartbeat #LoveSecret” collection and “Precious Love” collection around Valentine’s Day and Mother’s Day, respectively. The themes were unlocking the secrets of romance and adoring lovers, and caring for dearest mothers, respectively.
Ms. Cindy Yeung, Chairperson & Chief Executive Officer of Emperor W&J, said, “I am delighted to see a turnaround in financial performance. This was resulted from improved trading conditions combined with our stringent cost control strategies.”
Ms. Yeung continued, “The general retail market in Greater China is on an upturn. With improving consumer confidence, as well as the growth of disposable income for Chinese consumer, we expect to keep up the momentum. Moving ahead, we will continue to focus on optimising business operations in Greater China. As Chinese outbound tourists number continues to increase, we see our overseas business as a key growth driver with huge potential and room for expansion. We will continue to explore viable expansion opportunities that generate value for all our stakeholders.”
Financial Summary
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For the 6 months ended 30 June
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2017
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2016
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Changes
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Revenue
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1,827
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1,675
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+ 9.1%
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Gross profit
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487
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417
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+ 16.8%
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Gross profit margin
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26.7%
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24.9%
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+ 1.8pp
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Net profit/(loss)
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39
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(69)
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+ 156.5%
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Basic EPS/(LPS) (HK Cent)
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0.57
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(1.00)
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+ 157.0%
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Interim dividend per share
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0.17 cent
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Nil
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N/A
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– End –
About Emperor Watch & Jewellery Limited
With long establishment history of over 70 years in Hong Kong since 1942, Emperor W&J (887.HK) is a leading retailer principally engages in the sale of European-made internationally renowned watches, and self-designed fine jewellery products under its own brand, “Emperor Jewellery”. Through its comprehensive watch dealership, unique marketing campaigns and extensive retail network at prime locations in Hong Kong, Macau, the mainland China and Singapore, Emperor W&J established a strong brand image amongst its target customers ranging from middle to high income groups worldwide. In recognition of its efforts in investor relations communications, Emperor W&J was granted with “Best IR Company” (Small Cap) and “Best IR Presentation Collaterals” (Small Cap), and investor relations representative of Emperor W&J was selected as “Best Investor Relations Officer” (Small Cap), in HKIRA Investor Relations Awards 2017 by the Hong Kong Investor Relations Association. It was also received “Certificate of Excellence in Investor Relations” in the IR Magazine Awards - Greater China 2016. It is currently a constituent of Hang Seng Composite Index in Consumer Goods sector (HSCICG.IND). For more information, please visit its website: www.emperorwatchjewellery.com.
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