Luk Fook net slumps by 42pc to HK$866m

Local jeweler Luk Fook Holdings (International) (0590) said net profit for the year ended March 31 slumped by 42 percent from a year ago to HK$866 million, as the Sino-US trade tensions, social unrest in Hong Kong and the coronavirus pandemic weighed on  sales in Hong Kong and Macau. 

Earnings per share were HK$1.48 and the company declared a final dividend of 50 HK cents.

Revenue shrank by 29.2 percent to HK$11.23 billion while same-store sales for Hong Kong and Macau  declined by 33.3 percent. Same-store sales in the mainland also retreated by 20.2 percent from a year ago.

Retail revenue from the mainland market declined by 27.9 percent to HK$1.74 billion with the high gold price, as well as the continuing impact of the US-China trade war and pandemic on the macro-economic conditions, said the company.

As the border restrictions have not been fully lifted in Hong Kong, Macau and the mainland, same-store sales in Hong Kong and Macau slumped by about 80 percent from April to May, while that for self-operated and licensed shops in the mainland market recorded a much smaller decline.

The retail sentiment in Hong Kong and Macau has gradually recovered  from June, said the company, and decline of  SSS in the first three weeks this month narrowed to around 60 percent, while overall shops in mainland market improved with a less than 20 percent decline in June compared  with the 20 percent drop in April to May and 40 percent drop in March.

The company plans to reduce five shops in Hong Kong in the current financial year as it may take a longer time for mainland tourists to come back to the market, and would seek to open two new shops in Macau, it said.

The company will also focus its expansion on the mainland market.

The jeweler operated 2,120 shops globally as of the end of March, a net addition of 287 shops from a year ago.

The number of Hong Kong employees have been reduced from 7,600 a year ago to 6,500 as of end March. The reduction was mainly Hong Kong and mainland staff. The group has adopted natural turnover and no pay leave to save staff costs.