EMPEROR W&J ANNOUNCES 2014 ANNUAL RESULTS
Mar 31, 2015
Results Summary (For the year ended 31 December 2014 (the “Year”))
| Revenue decreased by 10.6% to HK$5,925 million (2013: HK$6,624 million), due to weak consumption sentiment in relation to continued austerity initiatives and local protest in the second half of 2014. |
| Watch segment was relatively resilient amid a consumption market slowdown with its revenue decreased by 6.2% to HK$4,824 million (2013: HK$5,143 million) and continued to be the key contributor, accounting for 81.4% (2013: 77.6%) of the total revenue. |
| Gross profit margin improved to 25.1% (2013: 24.1%), attributable to a more stablised pricing environment since late 2013 and price hikes exercised by many watch brands during 2014. |
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Net profit decreased to HK$138 million (2013: HK$290 million), mainly due to an uprise of rental pressure.
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| Maintained a strong cash debt-free position as at 31 December 2014. |
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Revenue from Singapore market increased by 39.4% to HK$165 million (2013: HK$118 million). Subsequent to the successful initiation in Singapore with sound and proven track record since 2013, the Group continues to eye further expansion opportunities in Asian markets and beyond, riding on the compelling prospects of Chinese travellers around the world.
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(Hong Kong, March 31, 2015) Emperor Watch & Jewellery Limited (the “Group” or “Emperor W&J”) (Stock code: 887), a leading retailer of luxury watch and fine jewellery, announces its annual results for the year ended 31 December 2014 (the “Year”).
2014 was undoubtedly a challenging year for retail sector. The luxury consumption market was weakening following China’s slowing economic growth and austerity initiatives. Local consumption sentiment further deteriorated in the wake of local’s protests that started in late September 2014. As a result, the Group’s revenue decreased by 10.6% to HK$5,925 million (2013: HK$6,624 million). Against the backdrop of the challenging market environment, revenue from the watch segment inevitably decreased by 6.2% to HK$4,824 million (2013: HK$5,143 million), which accounted for 81.4% (2013: 77.6%) of the total revenue and continued to be the key revenue contributor. The revenue from the jewellery segment slumped by 25.7% to HK$1,101 million (2013: HK$1,481 million). The higher revenue from the jewellery segment in 2013 was due to the special promotion campaigns on jewellery items and “gold fever” which brought additional traffic to Emperor Jewellery stores. 83.1% (2013: 83.7%) of the total revenue was supported by the Hong Kong market.
Basic earnings per share was HK2.00 cents (2013: HK4.20 cents). Emperor W&J recommends the payment of a final dividend of HK0.20 cent (2013: HK0.58 cent) per share. Together with the interim dividend of HK0.40 cent per share, the total dividend per share for the Year was HK0.60 cent (2013: HK1.26 cents).
During the Year, the Group further expanded its presence in prime retail locations. In June 2014, Patek Philippe independent corner, Chopard boutique and Emperor Jewellery store were opened in 1881 Heritage, which is the cultural and shopping hub in Tsim Sha Tsui featuring iconic and luxury shops. As at 31 December 2014, the Group ran a total of 88 stores (as at 31 December 2013: 74) in Hong Kong, Macau, the PRC and Singapore.
Carrying comprehensive watch collections in Greater China, the Group continued to enjoy solid and long-term relationships with major Swiss watch brand suppliers. Coupled with its excellent customer service and the strongest presence in prime retail locations in Hong Kong, the Group continued to enjoy the best pedestrian flows and fostered its leading position in Hong Kong.
During the Year, the Group continued to offer premium quality “Emperor Jewellery” products with the key focus on quality gem settings and fine jadeites. New collections with unique themed designs were regularly launched at different price points, to boost loyalty of sophisticated customers and target new shoppers in different income groups. With a view to enhancing brand equity of “Emperor Jewellery”, the Group had made special use of numerous celebrity endorsements, print advertisements and social media to promote its jewellery products. The Group also launched various cost-effective advertising campaigns on digital platforms and strengthened online and social media marketing efforts.
Ms. Cindy Yeung, Chairperson of Emperor W&J, said, “Despite a challenging operating environment, we remain cautiously optimistic towards the consumption power of the middle class, which is driven by the gradual improvement of the economic environment and their growing wealth. We are pleased that our stores in Singapore delivered promising growth in its second year of establishment. In order to capitalise the compelling prospects of Chinese travellers, we attempt to imitate the success of our initiation in Singapore and continue to look for other expansion opportunities in Asia.”
Key Financial Figures
| HK$’ million |
2014 |
2013 |
Changes |
| Revenue |
5,925 |
6,624 |
- 10.6% |
| Gross Profit |
1,489 |
1,600 |
- 6.9% |
| Gross Profit Margin |
25.1% |
24.1% |
+ 1.0ppts |
| EBITDA1 |
233 |
415 |
- 43.9% |
| EBITDA1 Margin |
3.9% |
6.3% |
- 2.4ppts |
| Net Profit |
138 |
290 |
- 52.4% |
| Net Profit Margin |
2.3% |
4.4% |
- 2.1ppts |
| Basic Earnings Per Share |
HK2.00 cents |
HK4.20 cents |
- 52.4% |
1 EBITDA represents earnings before interest, taxation, depreciation and amortisation of the Group.
- End -
About Emperor Watch & Jewellery Limited
With long establishment history of over 70 years in Hong Kong since 1942, Emperor W&J (887.HK) is a leading retailer principally engages in the sale of European made luxurious international branded watches, and self-designed fine jewellery products under its own brand, “Emperor”. Through its comprehensive watch dealership, unique marketing campaigns and extensive retail network at prime locations in Hong Kong, Macau, the PRC and Singapore, Emperor W&J established a strong brand image amongst its target customers ranging from middle to high income group from all over the world. Emperor W&J was prominently ranked as Best Mid-Cap Company (2nd), Best Investor Relations (3rd) and Best Managed Company (6th) by FinanceAsia 2014 Hong Kong Asia’s Best Companies Poll. It is also one of the constituent stocks on Hang Seng Composite Index in Consumer Goods sector (HSCICG.IND).
For more information, please visit its website: www.emperorwatchjewellery.com.
Investor/Media Enquiries
Ms. Winnie Kwong, Group Investor Relations Assistant Manager
Emperor Group
Tel: +852 2835 6791
Email: winniekwong@emperorgroup.com
Ms. Anna Luk, Group Investor Relations Director
Emperor Group
Tel: +852 2835 6783
Email: annaluk@emperorgroup.com
