Hung Fook Tong : Announcements and Notices - Annual Results Announcement for the Year Ended 31 December 2018

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HUNG FOOK TONG GROUP HOLDINGS LIMITED

鴻 福 堂 集 團 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1446)

ANNUAL RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2018

HIGHLIGHTS

•Revenue for continuing operations for the year ended 31 December 2018 ("2018") increased by 7.3% to HK$783.4 million from HK$729.8 million for the year ended 31 December 2017 ("2017").

-Revenue from retail business increased by 8.1% to HK$557.9 million, with retail network comprising 115 retail shops in Hong Kong as at 31 December 2018.

-Revenue from wholesale business increased by 5.6% to HK$225.5 million, with distribution network now covering 48 cities in 18 provinces, and a total of 75 distributors in Mainland China.

•Gross profit for continuing operations in 2018 increased by 4.8% to HK$476.3 million from HK$454.6 million in 2017, and gross profit margin for 2018 decreased by 1.5 percentage point to 60.8% as compared to 62.3% in 2017.

•Profit attributable to owners of the Company for 2018 was HK$9.4 million (2017: HK$8.1 million), which arrived at after deducting certain one-off expenses incurred relating to relocation of production facilities from Guanlan and Dongguan, Shenzhen City to Kaiping City, Guangdong Province, as well as closure of all retail stores in Guangzhou, Mainland China in 2018. Excluding the aforementioned one-off expenses, the profit attributable to owners of the Company would have been HK$28.4 million.

•Earnings per share for profit attributable to owners of the Company for 2018 was HK1.43 cents (2017: HK1.24 cents).

•Proposed final dividend and special dividend of HK0.43 cent and HK0.36 cent per ordinary share, respectively, totalling HK0.79 cent per ordinary share (2017: final dividend and special dividend of HK0.37 cent and HK0.31 cent per ordinary share, respectively, totalling HK0.68 cent per ordinary share).

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RESULTS

The board of directors (the "Board") of Hung Fook Tong Group Holdings Limited (the "Company") hereby announces the consolidated results of the Company and its subsidiaries (collectively the "Group") for the year ended 31 December 2018 together with comparative figures for the previous financial year 2017, as follows:

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

		Year ended 31 December
		2018			2017
	Note	HK$'000			HK$'000
					(Restated)
Continuing operations
Revenue	3, 4	783,383			729,776
Cost of sales	6	(307,036)			(275,137)
Gross profit		476,347			454,639
Other (losses)/income	5	(1,326)			453
Selling and distribution costs	6	(84,739)			(77,215)
Administrative and operating expenses	6	(380,232)			(366,540)
Operating profit		10,050			11,337
Finance income	7	100			120
Finance costs	7	(293)			(937)
Finance costs, net	7	(193)			(817)
Profit before income tax		9,857			10,520
Income tax credit/(expense)	8	2,888			(149)
Profit for the year from continuing operations		12,745			10,371
Loss for the year from discontinued operation	9	(4,437)			(2,369)
Profit for the year		8,308			8,002
Profit/（loss) attributable to:
Owners of the Company		9,374			8,106
Non-controlling interests		(1,066)			(104)
		8,308			8,002

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		Year ended 31 December
		2018		2017
	Note	HK$'000		HK$'000
				(Restated)
Other comprehensive (loss)/income:
Items that may be reclassified to profit or loss
- Currency translation differences for continuing
operations		(7,602)		7,442
- Currency translation differences for discontinued
operation		(68)		(190)
Other comprehensive (loss)/income, net of tax		(7,670)		7,252
Total comprehensive income for the year		638		15,254
Total comprehensive income/(loss) attributable to:
Owners of the Company		1,909		15,021
Non-controlling interests		(1,271)		233
		638		15,254
Total comprehensive income/（loss) attributable to
owners of the Company arises from:
Continuing operations		5,439		17,310
Discontinued operation		(4,801)		(2,056)
		638		15,254
Earnings per share for profit from continuing
operations attributable to owners of the Company
- Basic and diluted (HK cents per share)	10	2.11		1.60
Earnings per share for profit attributable to
owners of the Company
- Basic and diluted (HK cents per share)	10	1.43		1.24

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

		As at 31 December
		2018		2017
	Note	HK$'000		HK$'000
ASSETS
Non-current assets
Leasehold land and land use rights		56,059		58,054
Property, plant and equipment		288,562		236,843
Prepayments and deposits		28,271		28,273
Deferred income tax assets		11,438		8,753
		384,330		331,923
Current assets
Inventories		32,942		29,899
Trade receivables	12	43,356		54,935
Prepayments, deposits and other receivables		45,893		30,603
Amount due from a related company		690		690
Tax recoverable		1,715		986
Pledged bank deposits		-		1,070
Cash and cash equivalents		128,391		113,588
		252,987		231,771
Total assets		637,317		563,694
EQUITY
Equity attributable to owners of the Company
Share capital	13	6,559		6,559
Share premium	13	214,999		214,999
Reserves		50,369		44,655
		271,927		266,213
Non-controlling interests		(233)		1,038
Total equity		271,694		267,251

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		As at 31 December
		2018			2017
	Note	HK$'000			HK$'000
LIABILITIES
Non-current liabilities
Provision for reinstatement costs		3,830			4,994
Deferred income tax liabilities		86			441
Bank borrowings		58,615			31,659
		62,531			37,094
Current liabilities
Trade payables	14	40,450			28,378
Accruals and other payables	15	71,499			59,640
Provision for reinstatement costs		3,772			1,529
Receipts in advance		151,057			146,663
Bank borrowings		35,477			20,783
Taxation payable		837			2,356
		303,092			259,349
Total liabilities		365,623			296,443
Total equity and liabilities		637,317			563,694
Net current liabilities		(50,105)			(27,578)
Total assets less current liabilities		334,225			304,345

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