omniture

SU Group Holdings Reports First Half Fiscal Year 2024 Results

2024-07-01 19:00 4215

- 11.7% YoY Increase in Security Guarding and Screening Services Segment Revenues
- Cash and Cash Equivalents Increase Nearly 200% YoY

HONG KONG, July 1, 2024 /PRNewswire/ -- SU Group Holdings Limited (Nasdaq: SUGP) ("SU Group" or the "Company"), an integrated security-related engineering services company in Hong Kong, today announced financial results for the six months ended March 31, 2024. All U.S. dollar figures cited in this press release are based on the exchange rate of HK$7.8257 against US$1.00 as of March 29, 2024.

SU Group's Chairman and CEO, Dave Chan, commented, "Our business fundamentals remain strong, supported by our expanding portfolio of security-related engineering services and a strengthened balance sheet following our successful IPO on Nasdaq in January 2024. On a segment basis, we achieved an 11.7% increase in revenues year over year from security guarding and screening services for the six months ending March 31, 2024, compared to the same period last year. Our total revenue, which declined slightly year over year, would have been meaningfully higher if not for the timing shift of certain contracts to the second half of the year. Additionally, we absorbed the impact of a significant, non-recurring government contract recognized in the previous period but not in the current one."

SU Group's Chief Financial Officer, Calvin Kong, noted, "We continue to execute our financial model effectively, with increased revenue from higher-margin segments driving a 4.4% increase in gross profit for the six months ending March 31, 2024, compared to the same period last year. Importantly, our cash and cash equivalents increased nearly 200%, following the successful completion of our initial public offering earlier this year, giving us the resources to support our long-term growth. We remain focused on expanding our gross margins and enhancing operational efficiency as we strive to build value for all shareholders."

"We are in an exciting phase of our company's development, working to leverage our core business platform to drive accelerated growth," added SU Group's Chairman and CEO, Dave Chan. "We will continue to expand our portfolio of security-related engineering services, enhance our position through new strategic partnerships, and capture increased revenue opportunities in our target higher-margin segments. We aim to build upon our advantaged position with customers as we move forward."

Financial Results for the Six Months Ended March 31, 2024

Revenues decreased by approximately 5.4% to approximately HK$91.8 million for the six months ended March 31, 2024, from approximately HK$97.0 million for the six months ended March 31, 2023. The decline reflects a shift in timing of certain contracts from being recognized as revenue in the six months ended March 31, 2024 to now being expected to be recognized as revenue in the six months ended December 31, 2024, combined with the impact of a material non-recurring government contract that was recognized as revenue in the six months ended March 31, 2023 but not in the six months ended March 31, 2024. Revenues from provision of security guarding and screening services increased 11.7% to HK$35.6 million for the six months ended March 31, 2024, from HK$31.9 million for the six months ended March 31, 2023. Revenues from project and maintenance decreased 12.4% to HK$53.6 million for the six months ended March 31, 2024, from HK$61.1 million for the six months ended March 31, 2023. Revenues from equipment leasing decreased 34.1% to HK$2.6 million for the six months ended March 31, 2024, from HK$4.0 million for the six months ended March 31, 2023.

Cost of revenues decreased by 8.8% to HK$65.2 million for the six months ended March 31, 2024, from HK$71.5 million for the six months ended March 31, 2023, mainly due to a change in the contract size mix of the security-related engineering services performed.

Gross profit increased by 4.4% to HK$26.6 million for the six months ended March 31, 2024,  from HK$25.5 million for the six months ended March 31, 2023, mainly resulting from the decrease in cost of revenues.

Selling, general and administrative expenses increased by 12.7% to HK$15.6 million for the six months ended March 31, 2024, from HK$13.8 million for the six months ended March 31, 2023. The increase was mainly due to higher professional service fees required for the Company being a public entity.

Losses on disposal of property and equipment decreased by 20.7% to HK$0.6 million for the six months ended March 31, 2024, from HK$0.8 million for the six months ended March 31, 2023, mainly due to a decrease in the number of X-ray machines disposed.

Other income decreased by 26.8% to HK$0.8 million for the six months ended March 31, 2024, from HK$1.1 million for the six months ended March 31, 2023. The decrease was mainly due to a decrease in government subsidies.

Income tax expenses decreased by 45.0% to HK$1.0 million for the six months ended March 31, 2024, from HK$1.8 million for the six months ended March 31, 2023. The decrease was mainly due to a decrease in income before income tax and the reduction of assessable profits of certain subsidiaries since certain expenses incurred by the Company for and on behalf of the group were allocated to the subsidiaries.

Net income was HK$10.1 million (US$1.3 million) for the six months ended March 31, 2024, compared to HK$10.1 million for the six months ended March 31, 2023.

The Company had a balance of cash and cash equivalents of HK$47.2 million (US$6.0 million) with working capital of approximately HK$77.0 million (US$9.9 million), as of March 31, 2024.

About SU Group Holdings Limited

SU Group (Nasdaq: SUGP) is an integrated security-related services company that primarily provides security-related engineering services, security guarding and screening services, and related vocational training services in Hong Kong. Through its subsidiaries, SU Group has been providing turnkey services to the existing infrastructure or planned development of its customers through the design, supply, installation, and maintenance of security systems for over two decades. The security systems that SU Group provides services include threat detection systems, traffic and pedestrian control systems, and extra-low voltage systems in private and public sectors, including commercial properties, public facilities, and residential properties in Hong Kong. For more information visit www.sugroup.com.hk.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "we believe," "we intend," "may," "should," "will," "could" and similar expressions. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's ability to renew contracts with recurring customers; the Company's ability to secure new contracts; the Company's ability to accurately estimate risks and costs and perform contracts based on the Company's estimates; the Company's relationship with the Company's suppliers and ability to manage quality issues of the systems; the Company's ability to obtain or renew the Company's registrations, licenses, and certificates; the Company's ability to manage the Company's subcontractors; the labor costs and the general condition of the labor market; the Company's ability to effectively manage inventories; the Company's ability to compete effectively; the Company's dependence on a small number of suppliers for a substantial portion of the Company's supplies; the Company's ability to successfully manage the Company's capacity expansion and allocation in response to changing industry and market conditions; implementation of the Company's expansion plans and the Company's ability to obtain capital resources for planned growth; the Company's ability to acquire sufficient products and obtain equipment and services from the Company's suppliers in suitable quantity and quality; the Company's dependence on key personnel; the Company's ability to expand into new businesses, industries, or internationally and to undertake mergers, acquisitions, investments, or divestments; changes in technology and competing products; general economic and political conditions, including those related to the security-related engineering services industry; possible disruptions in commercial activities caused by events such as natural disasters, terrorist activities, political, economic, and social instability, and fluctuations in foreign currency exchange rates, and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission (the "SEC"), including the Company's most recently filed Annual Report on Form 20-F and its subsequent filings. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC.

 

(Financial Tables Follow)

 

SU GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



As of 

September 30,
2023


As of 

March 31,
2024


As of 

March 31,
2024



HK$


HK$


US$

Assets










Current assets










Cash and cash equivalents


16,400,123



47,221,060



6,034,100


Trade receivables, net


34,978,153



30,647,497



3,916,263


Inventories


40,919,214



44,977,581



5,747,420


Prepaid expenses and other current assets


1,590,259



6,645,049



849,132


Contract assets


3,187,403



6,176,549



789,265


Prepaid income tax




907,025



115,903


Total current assets


97,075,152



136,574,761



17,452,082












Non-current assets










Property and equipment, net


8,405,563



7,563,170



966,453


Intangible assets, net


144,879



102,379



13,082


Goodwill


1,271,160



1,271,160



162,434


Prepaid expenses and other non-current assets




2,485,909



317,660


Deferred offering expenses


3,853,500






Operating lease right-of-use assets, net


1,113,926



2,441,475



311,982


Investment in key management insurance policy


1,157,520



1,157,520



147,913


Deferred tax assets


1,418,419



1,595,125



203,832


Total non-current assets


17,364,967



16,616,738



2,123,356


TOTAL ASSETS


114,440,119



153,191,499



19,575,438












LIABILITIES AND SHAREHOLDERS' EQUITY










Current liabilities










Trade payables


16,104,581



6,826,897



872,369


Notes payables


3,503,768



2,738,293



349,910


Other payables


2,633,447



3,669,077



468,850


Accrued payroll and welfare


8,228,964



7,706,548



984,774


Operating lease liabilities – current


204,156



1,012,762



129,415


Income tax payable


1,058,040






Contract liabilities


22,748,443



37,570,236



4,800,879


Total current liabilities


54,481,399



59,523,813



7,606,197












Non-current liabilities










Operating lease liabilities – non-current


61,229



591,272



75,555


Other payables – non-current


996,069



600,525



76,738


Deferred tax liabilities


1,468,575



1,299,223



166,020


Other liabilities


1,008,306



590,917



75,510


Total non-current liabilities


3,534,179



3,081,937



393,823


Total liabilities


58,015,578



62,605,750



8,000,020












Commitments and contingencies




















Shareholders' equity










Ordinary shares (par value of HK$0.01 per share; 750,000,000 ordinary

    shares authorized and 12,000,000 and 13,647,500 ordinary shares

    issued and outstanding as of September 30, 2023 and March 31, 2024,

    respectively.)


120,000



132,500



16,931


Shares subscription receivables


(119,990)



(90)



(12)


Additional paid-in capital


14,642,029



39,691,720



5,071,971


Retained earnings


41,782,502



50,761,619



6,486,528


Total SU Group Holdings Limited shareholders' equity and total

    shareholders' equity


56,424,541



90,585,749



11,575,418


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


114,440,119



153,191,499



19,575,438


 

 

SU GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME




For the Six Months Ended March 31,



2023


2024


2024



HK$


HK$


US$

Revenues


97,043,825



91,845,615



11,736,409


Cost of revenues


(71,545,676)



(65,231,088)



(8,335,496)


Gross profit


25,498,149



26,614,527



3,400,913












Operating expenses










Selling, general and administrative expenses


(13,835,332)



(15,598,350)



(1,993,221)


Losses on disposal of property and equipment


(802,010)



(636,289)



(81,308)












Income from operations


10,860,807



10,379,887



1,326,384












Other income (expenses)










Other income


1,053,080



771,005



98,522


Finance expenses


(36,798)



(50,854)



(6,498)


Total other income, net


1,016,282



720,151



92,024












Income before income tax expenses


11,877,089



11,100,038



1,418,408


Income tax expenses


(1,773,354)



(976,169)



(124,739)


Net income


10,103,735



10,123,869



1,293,669


Less: Net income attributable to non-controlling interests


(105,775)






Net income attributable to SU Group Holdings Limited's

    ordinary shareholders


9,997,960



10,123,869



1,293,669












Net income per share










Basic and diluted


0.83



0.81



0.10


Weighted average number of shares










Basic and diluted


12,000,000



12,464,481



12,464,481


 

Source: SU Group Holdings Limited
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