HONG KONG, May 28, 2019 /PRNewswire/ --
Financial Highlights:
Honma Golf Limited ("HONMA" or the "Company"; together with its subsidiaries, the "Group"; HKEx stock code: 6858), one of the most prestigious and iconic brands in the golf industry, has announced its consolidated results for the year ended 31 March 2019 (the "year").
Driven by multiple growth initiatives, the Group continued to deliver solid revenue growth. During the year, the Group's revenue rose by 5.6% to JYP27,770.7 million (equivalent to USD251.1 million), with net profit increasing by 7.0% to JPY4,208.8 million (equivalent to USD38.1 million). The gross profit margin, however, slightly decreased by three percentage points primarily due to the price repositioning of Be ZEAL in Japan and the clearance of apparel and accessories stock from past seasons. The management has proposed a final dividend of JPY1.70 per share Together with the interim dividend of JPY1.75 paid on 12 December 2018, total dividends for the year will amount to JPY3.45 per share, representing approximately 50% of the Group's distributable profit for the year ended 31 March 2019.
The Group's products are sold in approximately 50 countries worldwide, primarily in Asia and across North America, Europe and other regions. Home markets of the Group, which include Japan, Korea and mainland China (including Hong Kong and Macau), contributed 83.8% of the Group's revenue in FY2018/19. In Asia, Korea witnessed the biggest year-on-year increase of 16.0%, while Europe and North America continued to lead the way in terms of growth, enjoying a y-o-y increase of 62.2% and 16.7% respectively.
HONMA currently offers golf clubs under three major product families: BERES, TOUR WORLD and Be ZEAL, each targeting specific consumer segments. Golf clubs account for the majority of the Group's business. Thanks to the successful launch of TW747, the 4th generation of the TOUR WORLD family, revenue for golf clubs increased by 6.4% to JPY22,467.7 million, representing 80.9% of the Group's total revenue. Golf balls recorded a significant revenue growth of 57.2% to JPY1,805.0 million, representing 6.5% of the total revenue.
Product innovation
HONMA applied its revolutionary proprietary adjustability technologies and traditional Japanese craftsmanship to the development and manufacturing of the new TW747 Series clubs it launched in 2HFY2018/19. The new product series boosted sales of the TOUR WORLD family by 124.7% in the second half of the year and by 30.5% on a full-year basis.
The Group re-designed its ball product portfolio during the year, resonating its club line up after having realized meaningful share of voice mainly in Japan and China. The continued effort to optimize product portfolio and dedicated go-to-market strategy contributed to a strong growth of ball sales by 57.3% on a full-year basis.
HONMA also re-launched its apparel line in January 2019 with a debut 2019 Spring/Summer collection, mainly in Japan and China, to further enrich its product range. On 28 January 2018, HONMA announced the formation of a strategic partnership with Itochu Corporation, one of the leading textile and trading companies in Japan to expand its apparel & accessories business, utilizing Itochu's networks and know-how in the apparel industry while maintaining a "golf total brand approach". The order book for the 2019 Spring/Summer collection doubled that of the 2018 Spring/Summer collection.
Business expansion in North America and Europe
During the year, the Group speeded up its North America growth strategy and appointed Mark King, the former president and CEO of TaylorMade, as a full time consultant to the Board to lead HONMA North America in October 2018. HONMA's growth strategy aims to capture the unique opportunities in super premium and premium performance consumer segments which account for a meaningful share of a market that represents 53% of the global golf market in terms of retail sales. The Group is increasing its footprint in the US with a new HONMA house based in the hotbed of the US golf industry - Carlsbad, California, together with 30 premier shop-in-shops and 50 on-course retail hubs in North America in the next 24 months. In Europe, the Group added 518 points of sale ("POS") in various regions for the year ended 31 March 2019.
Re-defining the HONMA brand
To elevate the global and tour presence of the HONMA brand, the Company signed a multi-year partnership with Justin Rose, one of the world's leading golfers, to be its Global Brand Ambassador starting from January 2019. During the 2018 season, Justin Rose was ranked world number one for a total of 13 weeks and currently ranks the third among the world's professional golfers. This endorsement agreement has already greatly increased HONMA's brand awareness in the US and Europe through Justin Rose's influence within the global golf industry, his media coverage and social media following.
In addition, in the build-up to HONMA's 60th anniversary in 2019, the Company agreed a deal to be the title sponsor of the 2018 HONMA Hong Kong Open, one of Asia's most prestigious tournaments and part of the European PGA Tour since 2001, which further improved HONMA's brand awareness in Asia.
Extensive sales and distribution network
HONMA operates the largest number of self-operated stores among major golf companies, allowing the Group to reach a broad customer base in its target markets. By 31 March 2019, the Group had approximately 3,734 POS, representing a y-o-y increase of 128 POS. Sales from distributors increased by 28.0% to JPY21,730.1 million as the Group continued to fuel growth via third-party retail channels to engage with younger and avid golfers across the globe. Revenue for self-operated stores, however, decreased by 35.2% to JPY6,040.6 million primarily in China, due to strategic closure of twenty stores ahead of the re-launch of HONMA's new apparel lines.
The Company also started revamping its customer relationship management ("CRM") systems in key markets such as Japan, China and the US, and is in the process of adding e-commerce capabilities to provide consumers with the ultimate 360-degree brand experience and to eventually increase online sales.
Looking ahead, Mr. LIU Jianguo, Chairman of the Board, President and Executive Director of Honma Golf Limited, said, "The Group is committed to building a world-leading golf lifestyle company on the foundation of its latest innovative technologies and traditional Japanese craftsmanship. We will continue to increase the market share in home markets by maintaining our leading position in the premium segment while penetrating deeper into the premium performance segment and pivoting growth in North America and emerging markets. The Company aspires to nurture complementary non-club product lines to provide customers with a complete golf lifestyle experience in a "total golf brand approach''.
About Honma Golf Limited
HONMA is one of the most prestigious and iconic brands in the golf industry. Founded in 1959, the Company utilizes the latest innovative technologies and traditional Japanese craftsmanship to provide golfers across the globe with premium, high-tech and the best performing golf clubs, balls, apparels and accessories. HONMA's products are sold in approximately 50 countries worldwide, primarily in Asia and across North America, Europe and other regions. The Company was successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on 6 October 2016 (SEHK stock code: 6858). As the only vertically integrated golf company with in-house design, development and manufacturing capabilities, a strong retail footprint in Asia and a diverse range of golf related products, HONMA is perfectly positioned to continually grow its business in Asia and beyond, benefitting from the return of golfers in mature golf markets such as the US and Japan and from increased participation in golf's new and under-penetrated markets such as Korea and China.