Financial Highlights (Unaudited):
*Net loss on derivative financial instruments is a non-cash item going through P&L which is in relation to the issuance of convertible bonds.
(Hong Kong, August 24, 2011) Emperor Watch & Jewellery Limited (the "Group" or "Emperor Watch & Jewellery") (Stock code: 887), a leading retailer of luxury watch and fine jewellery today announces its 2011 interim results for the six months ended 30 June 2011 (the "Period") with remarkable growth of revenue and net profit.
The Group achieved a satisfactory result for the Period and reported revenue of approximately HK$2,629 million, representing a significant growth of 48.3%. The robust revenue growth was mainly attributable to the expansion of market demand for luxury goods, appreciation of Renminbi and substantial increase of purchasing power of mainland tourists.
The Hong Kong market continued to be the key revenue contributor, taking up 81.7% of the Group's total revenue. The Group achieved encouraging performance on revenue in the PRC with a significant increase of 42.3% to HK$296 million (2010: HK$208 million). The revenue contribution from the jewellery sector further increased to 17.5% (2010: 13.8%) during the Period. Due to the enhanced mix between watch and jewellery business, the overall gross profit margin performance further increased to 28.6% (2010: 24.3%).
Excluding the net loss on derivative financial instruments, EBITDA of the Group increased significantly by 91.4% to HK$354 million and net profit for the Period was double to HK$265 million. Emperor Watch & Jewellery proposed an interim dividend of HK1.2 cents per share.
During the Period, the Group was able to maintain its strong and healthy financial position. Bank balances and cash on hand of the Group as at 30 June 2011 amounted to HK$851 million (2010: HK$602 million). Due to the conversion of convertible bonds during the Period, the gearing ratio of the Group (calculated on the basis of the total borrowings over total assets) as at 30 June 2011 significantly decreased to 0.2% (2010: 5.7%).
As at 30 June 2011, the Group had 73 stores in Hong Kong, Macau and the PRC. The Group's retail stores in Hong Kong are strategically located at the major high-end shopping places, namely, Canton Road and Nathan Road in Tsim Sha Tsui, and Russell Street in Causeway Bay. Russell Street is now recognised as the world's top shopping area ranking the second highest in terms of shop rental rate, showing the outstanding traffic flow in the area. With the lead of iconic flagship store in 1881 Heritage, the Group can capture the local shoppers as well as mainland visitors.
As the Group focused its resources on the store rollouts in the PRC during the Period, the number of stores in the PRC had grown from 40 as at 31 December 2010 to 52 as at 30 June 2011, covering the first-tier and second-tier cities including Beijing, Guangzhou, Shanghai, Chongqing, Kuming, Chengdu, Tianjin, Shenyang, Suzhou, Hengyang, Changzhou and Wuxi.
Ms. Cindy Yeung, Managing Director of Emperor Watch & Jewellery, said, "Being a prominent watch retailer in Hong Kong with a growing presence in the PRC and an expanding jewellery mix for margin improvement, the Group is definitely the best player to capture the market opportunities. With high retail credibility and tax exemption for international brand products, the Group's Hong Kong outlets are anticipated to continue to be patronized by enthusiastic shoppers from the PRC in the coming years."