omniture

Fulum revenue increase 12.9% in interim, Gross Profit Margin rose to 70.5%

Plan to open 7 new restaurants in Hong Kong and a "Fulum Palace" restaurant in Fujian Province during the year
Fulum Group
2015-11-26 01:25 3466

HONG KONG, Nov. 26, 2015 /PRNewswire/ --

Financial Highlights

HK$ million

FY2015/6 Interim

FY2014/5 Interim

Change

Revenue

1,308.8

1,159.1

+12.9%

Restaurant operations




  "Fulum" main brand

979.9

880.3

+11.3%

  "Sportful Garden" main brand

166.9

167.2

-0.2%

  "Fulum Concept" main line

124.1

70.9

+74.9%

Sale of food and other operating items

37.9

40.7

-6.6%

EBITDA

82.1

88.1

-6.7%

Profit for the period

27.4

40.1

-31.6%

Profit attributable to owners of the Company

27.4

40.1

-31.6%

Basic Earnings Per Share (Cent)

2.11

4.11

-48.7%

The board of directors of Fulum Group Holdings Limited (HKEx stock code: 1443, the "Group" or "Fulum") announced its interim results and its financial position. For the six months ended 30 September 2015, profit attributable to shareholders of the Company has decreased by 31.6% and reached HK$27.4 million. During the period, revenue increased by 12.9% to HK$1,308.8 million, of which revenue from "Fulum Concept" has increased by 74.9% to 124.1 million. Basic earnings per share are 2.11 cents.

During the period, the Group continued to implement aggressive strategy by establishing more restaurants and diversifying the themes of restaurants. The Group is endeavour to seek innovation and capture the demand for local catering market by launching different restaurants under the "Fulum Concept" line, including "MeokBang Korean BBQ & Bar" specialising in Korean barbecue, "Mount Hallasan BBQ" specialising in Korea Jeju cuisine and "Winter Yutango Restaurant" specialising in grilled fish, together with "Royal One" under the "Fulum" line specialising in wedding banquets, in order to attract more young customers.

Business Review

Despite the current stagnant retail market in Hong Kong, as an enterprise rooted in Hong Kong, the Group is still confident towards the catering market in the long run.

During the period, the Group has opened 2 restaurants under the "Fulum" line and 6 restaurants under the "Fulum Concept" line in Hong Kong. As of 30 September 2015, the Group has a total of 69 restaurants in Hong Kong, among which, 42 restaurants are under the "Fulum" line, 10 restaurants are under the "Sportful Garden" line and 17 restaurants are under the "Fulum Concept" line.

For Mainland China market, the Group opened a new "Fulum Palace" restaurant in Zhuhai during the period. Together with the "Fulum Palace" restaurant opened in Guangzhou, the Group has a total of 2 restaurants in Mainland China. Both of them are located in the residential areas with dense population so as to meet the public demand for Chinese cuisine and wedding venues within the regions.

Furthermore, the Group introduced a customer loyalty membership card programme in June 2015 with the pilot testing in the business of "Sportful Garden" in Hong Kong for our loyal customers to accumulate credit points apart from offering immediate discount benefits in order to encourage their frequent visits. As at 30 September 2015, the number of members exceeded 10,000.

Financial Results

Profit Attributable to Owners of the Company

The profit attributable to owners of the Company decreased by 31.6% to HK$27.4 million for the six months ended 30 September 2015. The decrease was mainly affected by the higher costs of labour and property rentals during the six months ended 30 September 2015.

Revenue

Revenue increased period-on-period by 12.9%, to HK$1,308.8 million for the six months ended 30 September 2015.

During the period, revenue from restaurant operations increased by 13.6% to HK$1,270.9 million for the six months ended 30 September 2015. The increase was mainly due to the opening of new restaurants.

Revenue from the restaurants under brand of "Fulum", "Sportful Garden" and "Fulum Concept" are 979.9 million, 166.9 million and 124.1 million respectively, of which revenue from "Fulum Concept" has increased by 74.9%.

Revenue from sales of food and other operating items decreased by 6.6% to HK$38.0 million for the six months ended 30 September 2015. The decrease was mainly due to the decrease in sales of processed or semi-processed food ingredients from our central kitchen and logistics centre primarily to certain restaurants then owned by our controlling shareholder.

Gross Profit and Gross Profit Margin

Gross profit (Gross profit equals revenue minus cost of inventories sold) increased by 16.3% to HK$922.4 million for the six months ended 30 September 2015. The increase was mainly due to contribution from new restaurants.

The gross profit margins (Gross profit margin is calculated dividing gross profit by revenue and multiplying the resulting value by 100%) of the Group for each of the six months ended 30 September 2015 and 2014 are at approximately 70.5% and 68.5%, respectively. The increase was mainly due to the benefits of controlling costs efficiently in the central kitchen and logistics center.

Prospects 

Looking ahead, despite the fact that Hong Kong's economy is expected to be uncertain under the impact of unstable external factors, the Group is still confident towards the overall catering market and will continue to adopt aggressive strategy to open more new restaurants and develop diversified brands. During the year ending 31 March 2016, it is expected that the Group will open 7 new restaurants in Hong Kong so as to seize a larger market share. "MeokBang Korean BBQ & Bar" under the "Fulum Concept" line will be one of the featured restaurants under the expansion plan of the Group. Apart from self-owned brands, the Group is proactively identifying suitable overseas partners and considering the introduction of well-known foreign restaurant brands by way of franchise operation.

Moreover, the gradual decrease of the overall rental level in Hong Kong can help the Group identify prime sites to open more new restaurants so as to achieve higher returns.

For Mainland China market, leveraging on the public's inelastic demand for catering, it is expected that the overall catering market will continue its healthy development. As a result, the Group is optimistic towards the long-term development of the overall catering market. The Group plans to open a "Fulum Palace" restaurant in Fuzhou City in Fujian Province during the year ending 31 March 2016 in order to proactively enhance the brand recognition of Fulum Group and expand its customer base.

The Group will proactively look for the opportunity of mergers and acquisitions in the future. The Group will continue to assess the local and domestic dining habits and trends. Meanwhile, the Group is identifying suitable targets including restaurants and catering related businesses for mergers and acquisitions in order to strengthen the business of the Group, making Fulum Group a diversified catering kingdom.

Mr. YEUNG Wai, chairman and chief executive officer and executive director of the Group said, "Fulum is a diversified local food and beverage brand and currently owns 14 brands and 71 restaurants. Looking forward, we will continue to explore new specialty dishes to enrich the content of our restaurants portfolio. We are also actively seeking merger and acquisition opportunities in order to expand our market share and location coverage."

-END-

About Fulum Group Holdings Limited

Fulum Group originated its business in 1992. The first restaurant "Fulum Hotpot Restaurant" was run in Tai Kok Tsui. It has been developed to a group of 14 brands and 71 restaurants serving a variety of cuisines, along with over 4000 fulltime employees under our Group. Fulum Group was listed successfully in the Main Board of the Stock Exchange of Hong Kong Limited in November 2014, with the Stock Code: 1443. Our business developments have turned into another new page in the milestone.

We have a network of over 70 restaurants in Hong Kong and provide different types of cuisines under various brands. We are planning to expand our Chinese cuisine business in Mainland China with the aim of providing high quality food to customers in the Greater China region.

Source: Fulum Group
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