Press Releases

26 November 2018

Interim Results Announcement For The Six Months Ended 30 September 2018

Café de Coral Group achieved solid results in the first half of FY2018/19. The Group experienced strong profit growth as investments in internal improvements began to bear fruit. Revenue performance was stable whilst we focused on solidifying fundamentals and rationalising our branch network.

During the reporting period, the dining-out market continued to grow – although customers are becoming more selective and price-sensitive in their dining habits. At the same time, labour shortages and a record low unemployment rate are proving to be challenging for staff recruitment. However, the Group remains confident in its ability to maintain growth through good times and bad, as it has proven over the past 50 years.

Ongoing investment in operational improvements is starting to pay off in the Group’s core quick service restaurant (QSR) business – translating into greater efficiency and a broadened customer base. The business continued to fine tune its products, services, technology and operating model for optimum performance during the period. All of these initiatives have contributed to improvement in margins.

The casual dining business achieved positive growth in profit and developed strong business momentum during the first six months of the year. Reinforced portfolio and branding, supported by a commitment to quality ingredients and seasonal promotions have improved the business’ contribution to the Group’s results.

Despite a challenging operating environment, the Mainland China business continued to deliver steady growth in line with the market. During the period under review, the Group expanded its shop network in the market – including two key new outlets at the Shenzhen and Guangzhou airports.

Highlights

  • The Group’s revenue for the first six months of FY2018/19 amounted to HK$4,198.5 million, a 1.7% increase compared to the corresponding period last year. Profit attributable to shareholders improved 16.2% to reach HK$239.1 million as investments in our core efficiency began to realise.
  • Our quick service restaurants and institutional catering focused on enhancing the Customer Journey through products, services and our operating model, contributing to the improvement in margins and profitability of the Group. 
  • The casual dining business improved its performance substantially after rationalising its portfolio and addressing fundamentals, and thereby establishing a solid platform for future growth.
  • Mainland China operations delivered stable results and the Group is keen to accelerate its network expansion in the Greater Bay Area.
  • An interim dividend of HK19 cents per share (2017: HK18 cents) was declared.

OUTLOOK

The overall outlook for the food and beverage industry remains competitive. Although the Hong Kong Government’s newly introduced minimum wage requirements will pose a challenge, the Group is confident that we can continue to drive positive growth in performance.

  • Prospects for the Hong Kong QSR business remain positive. Leveraging the business’ strong foundation and reputation, we are confident the Group will be able to reinvent the business and create greater value for our customers.
  • Casual dining will continue to fine-tune operations and actively look for opportunities to grow the business in the context of the Group’s multi-brand strategy. 
  • Although the Mainland China business is expected to face challenges in the form of a tight labour market and uncertainty created by the China-US trade friction, the Group remains confident in its expansion opportunities in the Greater Bay Area – particularly in Guangzhou and Shenzhen – which will support healthy and aggressive growth, and drive future performance.

Building on lessons learned over the past 50 years, the Group is optimistic about its long-term prospects, and its ability to adapt and evolve for continuous, sustainable success.

Please click the below link for the announcement:

http://www.cafedecoral.com/eng/investor_relations/announcements/images/Announcements2018/e2018IR%20Announcement(20181126)1130am(clean).pdf

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