EQS-News / 28/11/2019 / 17:16 UTC+8
*FOR IMMEDIATE RELEASE *
*Chow Tai Fook Jewellery Group Announces FY2020 Interim Results and *
*The Unaudited Key Operational Data from 1 October to 21 November 2019*
*Financial Highlights*
For the six months ended 2019 2018 YoY Change
30 September _HK$ million_ _HK$ million_
Revenue *29,533* 29,703 -0.6%
Gross profit *8,147* 8,529 -4.5%
_Gross profit margin _ _27.6%_ _28.7%_
_Adjusted gross profit _30.7%_ _28.1%_
margin (1)_
Core operating profit (2) *3,527* 2,989 +18.0%
_Core operating profit _11.9%_ _10.1%_
margin (2)_
Profit before taxation *2,200* 2,722 -19.2%
Profit attributable to *1,533* 1,936 -20.8%
shareholders of the
Company
Earnings per share - *0.15* 0.19 -20.8%
Basic (HK$)
Interim dividend per *0.12* 0.15
share(3) (HK$)
_(1)_ _Adjusted gross profit margin, a non-IFRS measure,
eliminates the effect of unrealised loss (gain) on gold
loans, which the Company believes is useful in gaining a
more complete understanding of its operational performance
and the underlying trend of its businesses_
_(2)_ _Core operating profit and the corresponding margin, a
non-IFRS measure, being the aggregate of gross profit and
other income, less
selling and distribution costs and general and
administrative expenses and unrealised loss (gain) on gold
loans, which the Company
believes is useful in gaining a more complete
understanding of its operational performance and the
underlying trend of its core businesses_
_(3)_ _The dividend payout ratio for 1HFY2020 is approximately
78.3%_
(Hong Kong, 28 November 2019) Chow Tai Fook Jewellery Group Limited ("Chow Tai
Fook Jewellery Group", "the Group" or "the Company"; SEHK stock code: 1929), a
Hong Kong Main Board listed company with 90 years of heritage, today announces
its interim results for the six months ended 30 September 2019 ("1HFY2020").
The Group's revenue was stable at HK$29,533 million in 1HFY2020 (1HFY2019:
HK$29,703 million), boosted by the POS openings and steady Same Store Sales
Growth ("SSSG") of the Mainland China segment. Gross profit amounted to
HK$8,147 million (1HFY2019: HK$8,529 million). Adjusted gross profit margin
increased to 30.7% in 1HFY2020, thanks to the improvement in like-for-like
gross profit margin of gold products resulted from the surge of international
gold price. Core operating profit surged by 18.0% year-on-year. Core operating
profit margin increased to 11.9% benefitted from the adjusted gross profit
margin improvement. The Group's profit before taxation dropped by 19.2%,
mainly impacted by the unrealised loss of gold loans of HK$917 million arising
from the surge in international gold price during the period.
Profit attributable to shareholders of the Company decreased by 20.8% to
HK$1,533 million (1HFY2019: HK$1,936 million). Basic earnings per share were
reported at HK$0.15 (1HFY2019: HK$0.19). The Board has declared an interim
dividend of HK$0.12 per share. The payout ratio approximates 78.3% in
1HFY2020.
*Business Review*
While the volatile macro backdrop and a surge in international gold price
dampened consumer demand, SSSG in Mainland China stood at 1.8% in 1HFY2020 as
Same Store Average Selling Price recorded a robust increase during the period;
whereas Same Store Sales in Hong Kong and Macau decreased by 27.5% in 1HFY2020
due to a tough base of comparison and sluggish business environment.
The Group's retail network expanded to 3,490 POS, with a net addition of 356
POS as at 30 September 2019. During 1HFY2020, the Group opened a net of 333
CHOW TAI FOOK JEWELLERY POS in Mainland China. As the Group has been
leveraging franchisees to deepen the market penetration in lower tier and
county level cities, approximately 55.0% of the net openings were located in
Tier III, IV and other cities. Tier III, IV and other cities achieved a robust
high-teens RSV growth during the period, mainly driven by the new openings and
a relatively stronger Same Store performance. While in Hong Kong and Macau,
the Group had a net addition of 4 POS, and in other markets 2 POS.
The Group's multi-brand strategy is being implemented to expand the customer
base. JEWELRIA is a segmentation of Chow Tai Fook's diversified retail
experience which offers international jewellery product offerings. Annoushka
and Kagayoi are two international brands that have recently joined the
JEWELRIA family in 1HFY2020. Annoushka, a jewellery house based in London, is
the creation of renowned designer Annoushka Ducas MBE, which displays
playfulness, wearability and daily glamour through the bold colour
combinations. Kagayoi, a jewellery brand from Japan founded in 1861, embodies
Kyoto's unique aesthetic sense and deep heritage.
T MARK, the Group's disruptive diamond brand in pursuit of true diamond
authenticity and traceability, recorded a Retail Sales Value ("RSV") growth of
10.2% year-on-year in Mainland China while a drop of 15.0% in Hong Kong and
Macau. Sales of T MARK products accounted for 19.2% and 28.1% of the diamond
products RSV in Mainland China and Hong Kong and Macau, respectively. As at 30
September 2019, there were 4 POS and 721 counter-in-shop ("CIS") in Mainland
China, as well as 1 POS and 61 CIS in Hong Kong and Macau distributing T MARK
products. A personalised T MARK embossment service has launched in October to
enable selected customers to customise their own codes for their T MARK
diamonds.
For HEARTS ON FIRE, a new jewellery collection designed by Hayley Paige was
unveiled in October 2019. Hayley is one of the most sought-after bridal dress
designers from the United States. The new collection translated Paige's
imaginative, whimsical wedding gowns into a unique and captivating bridal
jewellery line. As at 30 September 2019, there were 12 POS and 199
shop-in-shop/counter-in-shop.
Backed by a 49.6% growth of gem-set jewellery, e-commerce business recorded a
RSV growth of 9.7% in 1HFY2010, contributing to 4.9% of RSV and 14.1% of
retail sales volume in Mainland China. Average daily online traffic reached
487,000 unique visitors. The number of followers on official Sina Weibo,
Tencent Weibo and WeChat accounts also increased to over 9.6 million.
As at 30 September 2019, there were 2,380,000 members in Mainland China, with
a 24.1% repeat purchase as a percentage of respective RSV. In Hong Kong and
Macau, the number of members reached 1,130,000 and the repeat purchase as a
percentage of respective RSV was 32.9%.
*Prospects and Strategies*
A challenging benchmark for 1HFY2020 was set against a tough comparison base
to the same period last year. The market has been softening amidst the macro
headwinds. The Hong Kong and Macau market will remain challenging in the near
term. Yet, our strategy on market penetration to lower tier and county level
cities in Mainland China will continue to keep our growth momentum.
Regardless of the near-term challenges, the Group maintains the focus on the
long-term goals and sustainable development, and invests for the future with
foresight. The Group has examined the operations and financial position and
laid out three key immediate measures to mitigate the short-term impact and
improve the Group's risk management. These are 1) to enhance our healthy
financial position; 2) to optimise the use of our resources and 3) to empower
our people to be "intrapreneurs". Furthermore, in light of our "Smart+ 2020"
strategic framework, we will continue to leverage technology to convert
innovative ideas into notable retail experiences and enhance operating
efficiency.
Chow Tai Fook Jewellery Group Chairman Dr. Henry Cheng remarked, "Over the
past 90 years, our innovative spirit has steered us to weather storms and
become a seasoned jewellery leader. With a wise strategy and meticulous
execution as well as our industry know-how, I am confident that we will pave
the way for viable long-term returns. "
*The Unaudited Key Operational Data from 1 October to 21 November 2019*
From 1 October up to 21 November 2019, the year-on-year changes of Retail
Sales Value and
Same Store Sales are as follows:
*(**% change compared to the same period last
year)*
*Mainland China* *Hong Kong and
Macau*
Retail Sales Value growth +15% -39%
Same Store Sales growth +1% -38%
Same Store Sales volume growth -11% -48%
*Same Store Sales growth by
product*
+2% -50%
? Gem-set jewellery
-4% -35%
? Gold products
_Remark: The above data has not been reviewed nor audited by the auditors of
the Company._
_- End -_
*Chow Tai Fook Jewellery Group Limited *
Chow Tai Fook Jewellery Group Limited (the "Group"; SEHK stock code: 1929)
listed on the Main Board of The Stock Exchange of Hong Kong in December 2011.
The Group's vision is to become the most trusted jewellery group in the world.
Founded in 1929, the Group's iconic brand "CHOW TAI FOOK" is widely recognised
for its trustworthiness and authenticity, and is renowned for its product
design, quality and value. A long-standing commitment to innovation and
craftsmanship has contributed to the Group's success, along with that of its
iconic retail brand, and has been embodied in its rich 90 year heritage.
Underpinning this success are our long held core values of
"Sincerity?Eternity".
The Group's multi-brand strategy comprises the ARTRIUM, JEWELRIA and CTF WATCH
brands that are endorsed by the CHOW TAI FOOK master brand, in addition to
other brands including HEARTS ON FIRE, T MARK, SOINLOVE and MONOLOGUE.
The Group's commitment to sustainable growth is anchored in its "Smart+"
strategy, which is in place to promote long term innovation in the business,
in people and in culture. Another asset underpinning sustainable growth is a
sophisticated and agile business model. This supports the Group by fostering
excellence and extending opportunities along the entire value chain to
communities and industry partners across the world.
With an extensive retail network in Greater China, Japan, Korea, Southeast
Asia and the United States, and a fast-growing e-commerce business, the Group
is implementing effective online-to-offline ("O2O") strategies to succeed in
today's omni-channel retail environment.
______________________________________________________________________________
__
*Media Enquiries:*
*Chow Tai Fook Jewellery Group Limited *
Danita On Peony Sze
Director, Investor Relations and Senior Manager, Investor
Corporate Communications Relations and
Corporate Communications
Tel: (852) 2138 8501 Tel: (852) 2138 8337
Email: danitaon@chowtaifook.com Email: peonysze@chowtaifook.com
Document: http://n.eqs.com/c/fncls.ssp?u=OKVFFXPFPV [1]
Document title: Chow Tai Fook Jewellery Group Announces FY2020 Interim Results
and The Unaudited Key Operational Data from 1 October to 21 November 2019
28/11/2019 Dissemination of a Marketing Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
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(END) Dow Jones Newswires
November 28, 2019 04:16 ET (09:16 GMT)
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