Dickson and Fairwood take hits in profits

Business | Kevin Xu and Avery Chen 28 Nov 2019

Luxury goods retailers and fast food chain operators have taken a hit amid gloomy consumer sentiment and months of social unrest.

Luxury goods retailer Dickson Concepts (International) (0113) reported that interim net profit fell 10.9 percent on-year to HK$119 million, from HK$133.5 million in 2018.

For the six months ended September 30, turnover fell 6.6 percent on-year to HK$1.71 billion.

Dickson Concepts declared an interim dividend of HK 8 cents - unchanged from 2018.

Meanwhile, local fast-food chain Fairwood (0052) posted its net profit for the six months ended September 30 fell 43.1 percent year-on-year to HK$57.3 million due to rising of rental and labor costs amid a weakened market sentiment, also affected by the adoption of new financial reporting standards.

That came after Cafe de Coral (0341) reported a 34.5 percent decline in interim profits from a year ago to HK$149.7 million due to "a challenging market environment".

However, the two fast-food chain operators, both founded by members of local food and beverage specialists the Lo family, did not say how much of an impact the social unrest had actually had on performance.

Fairwood said net profit, excluding the impact of the new reporting standards, fell 29.4 percent year-on-year to HK$71.1 million.

Basic earnings per share were 44.28 HK cents.

The company declared an interim dividend of 23 HK cents per share.

Revenue for the half year ended September rose by 4.5 percent to HK$1.54 billion. But the gross profit margin fell 2.4 percentage points to 11.3 percent.

Fairwood said it will put extra effort towards margin improvement, such as negotiating with landlords for more favorable rental terms.

The company had 155 stores in Hong Kong and 12 stores in mainland China as of September 30.

Shares of Fairwood rose 0.49 percent to HK$20.5 on Wednesday.

About 200 to 300 local restaurants have closed amid months-long anti-government protests, catering industry lawmaker Tommy Cheung Yu-yan said last month.

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