Best Mart 360 announces 2021/22 Interim Results
Revenue and net profit increased by 21.7% and 56.5% YoY respectively
Proposed an interim dividend of HK1.5 cents per share
HONG KONG, Nov. 29, 2021 /PRNewswire/ -- Best Mart 360 Holdings Limited ("Best Mart 360" or the "Company", together with its subsidiaries, the "Group"; stock code: 2360.HK), a leisure food retailer in Hong Kong, announced its interim results for the six months ended 30 September 2021 ("the Period under Review"). During the Period under Review, the revenue recorded by the Group amounted to approximately HK$862,978,000, representing an increase of approximately 21.7% as compared to approximately HK$709,387,000 for the six months ended 30 September 2020 (the "Corresponding Period Last Year"). The increase in revenue mainly reflected the success of the Group's expansion strategy and product mix optimisation.
During the Period under Review, profit attributable to owners of the Company amounted to approximately HK$22,699,000 (six months ended 30 September 2020: approximately HK$35,689,000). The decrease in profit was mainly due to the fact that the Group received an aggregate amount of approximately HK$21,189,000 subsidy income from the governments of Hong Kong and Macau in the Corresponding Period Last Year, while neither government had introduced any subsidy schemes during the Period under Review. Excluding the related non-recurring subsidy income, the profit attributable to owners of the Company for the six months ended 30 September 2021 increased by approximately 56.5% compared to the Corresponding Period Last Year.
During the Period under Review, basic earnings per share was HK$2.3 cents (six months ended 30 September 2020: HK$3.6 cents). The Board recommended the payment of interim dividend of HK$1.5 cents per share.
CHAIN RETAIL STORES
As at 30 September 2021, the Group operated a total of 129 chain retail stores, including 124 retail stores in Hong Kong and 5 retail stores in Macau (112 retail stores and 3 retail stores respectively as at 30 September 2020). The Group continued to strengthen its presence in the local community, with most of the newly opened retail stores in Hong Kong during the Period under Review locating in shopping arcades in community or residential areas with a view to providing better services to the local community. Moreover, larger retail spaces for new stores will be preferred over time to enable the Company to provide a more optimised and diversified product mix and a more comfortable shopping experience for customers. The rental expense (on a cash basis) to sales revenue ratio of retail stores for the six months ended 30 September 2021 was approximately 11.8% (approximately 12.3% for the six months ended 30 September 2020), representing a decrease of 0.5 percentage point compared to the Corresponding Period Last Year. Such improvement was mainly attributable to the effectiveness of the Group's strategy in selecting retail locations and the improvement in same store sales. During the Period, the Group recorded a 5.6% growth in same store sales performance.
The pandemic outbreak has led to a change in lifestyle for Hong Kong people. An increasing number of Hong Kong people prefer to stay home for meals or even enjoy cooking at home during the pandemic, resulting in a growing demand for quality food ingredients and products. The Group's new global gourmet store, "FoodVille", was launched in response to such demand and the first FoodVille first store was officially opened in September in Tseung Kwan O, which mainly provides globally sourced medium-to-high-end quality food products ranging from wines, chocolates, health food, cheeses, western sauces and ingredients from around the world to satisfy consumers' desire for high-quality tastes.
Furthermore, the Group continued to expand its outbound business. The number of retail stores in Macau increased to 5 as at 30 September 2021 (as at 30 September 2020: 3). The encouraging result from Macau business contributed to the Group's revenue and profitability during the Period under Review .
GROSS PROFIT AND GROSS PROFIT MARGIN
Gross profit for the Period under Review amounted to approximately HK$279,132,000 with a gross profit margin of 32.3%, as compared to a gross profit of approximately HK$222,761,000 with a gross profit margin of 31.4% for the Corresponding Period Last Year. Gross profit margin increased by 0.9 percentage point, which was mainly due to the product adjustment strategy and the constant effort to improve bargaining power, which enabled the Group to control the Group's procurement costs effectively.
During the Period under Review, the Group adhered to its global procurement policy by sourcing a broad spectrum of products worldwide to optimise its product portfolio. For the six months ended 30 September 2021, the Group has sold more than 900 brands and approximately 3,000 SKUs of products, offering customers a diversified range of choices. In addition to optimising its product range, the Group will also be embarked on sorting the wheat from the chaff to make room for more new products and flavours in order to attract customers.
During the Period, the Group endeavored to enrich the product mix. Besides constantly offering a wider range of masks at competitive prices, the Group also broadened its range of products such as frozen and chilled food, sauces and condiments, Chinese delicacies, dairy products and alcoholic beverages to promptly meet the market demand and changes for these daily household food products. The number of SKUs for the above products during the Period under Review increased from approximately 470 in the Corresponding Period Last Year to approximately 880 during the Period, and the revenue derived from these products has also increased more than double compared to the Corresponding Period Last Year, accounting for approximately 22.8% of the Group's total revenue for the Period under Review (for the corresponding period in 2020: approximately 13.4%). This product strategy has enriched the product selection to meet the market needs of the local community, strengthened the Group's sales and stabilised its income stream. As at 30 September 2021, the Group had 36 retail stores located in Hong Kong that provided frozen and chilled food products (18 stores as at 30 September 2020).
During the Period under Review, the Group continued to actively develop its private label products to maintain a more flexible and effective control of its product quality, availability and profitability. For the six months ended 30 September 2021, sales derived from private label products amounted to approximately HK$140,044,000, representing an increase of approximately 1.7 times from approximately HK$50,968,000 for the six months ended 30 September 2020, and accounted for approximately 16.2% of the Group's overall revenue for the Period under Review, (for the Corresponding Period Last Year: approximately 7.2%). During the Period under Review, the Group has developed a cumulative total of 11 private labels and more than 150 products, including masks, canned Chinese delicacies, cereals, milk, honey, nuts and dried fruits and a wide range of leisure food products.
Given that the retail business of the Group is consumer-driven, substantial efforts have been placed in developing and reinforcing its customer base. Accordingly, the Group has established a membership scheme since April 2015 to promote consumer loyalty, stimulate sales and expand customer base. In order to further deepen customer stickiness and expand customers' coverage, the Group has used big data analysis and reformulated its marketing strategy, and launched a new membership mobile app 2.0 in June 2020. The membership rewards under this new membership scheme have also been fully optimised and enhanced, with more membership benefits such as APP e-stamp promotion, special offers for selected products and access to latest market information, which enable the Group to attract more new members. Through diversified marketing strategies, the Group aims to strengthen the membership core from within and attract new customers through outward expansion, adopt an effective and targeted approach in fostering the ties between members and the Group, thereby generating recurring businesses with members and driving sustainable growth for the Group's business.
During the Period under Review, the number of the Group's registered fans and members increased from approximately 1,519,300 as at 30 September 2020 to approximately 1,764,600 as at 30 September 2021, representing an increase of approximately 16.1%. Since the launch of the mobile app, the number of mobile app members has reached 637,100 as at 30 September 2021 (as at 30 September 2020: 368,200).
As at 30 September 2021, the number of full-time and part-time employees of the Group was approximately 900 (30 September 2020: 798). In order to retain talented staff and strengthen the cohesion and loyalty among employees, the Group regularly reviews and updates its employee benefit plans and remuneration packages with reference to labour market supply and labour cost trend, as well as individual performance, and provides appropriate incentives. Staff costs (excluding Directors' emoluments) for the six months ended 30 September 2021 accounted for approximately 10.1% of the revenue (six months ended 30 September 2020: approximately 9.6%). The relative increase in the ratio of staff costs to revenue as compared to the Corresponding Period Last Year was mainly due to the recruitment of additional management personnel and office staff during the Period under Review to support the Group's active development of the various expansion and enhancement projects, as well as recruitment of additional warehouse staff to cope with the expansion of retail store network in Hong Kong and Macau. At the same time, in order to boost the morale of frontline staff and attract more talents to join the Company, during the Period under Review, the Group has made a relatively large improvement to the remuneration package of frontline staff to align with store expansion needs.
Looking ahead, the Group will continue its effort in persistently seeking appropriate opportunities to expand its retail network in Hong Kong and Macau and continue to review the geographical distribution of its stores, with a particular focus on increasing its presence in residential areas, to better meet the consumption needs of the local community. At the same time, the Group will review store expansion opportunities in the market from time to time, adjust the layout of existing retail stores on an ongoing basis with an aim to provide a comfortable and leisurable shopping experience for customers, and enhance the sales efficiency of each retail store. The Group will continue to strengthen the core competitiveness of its brands, adhere to its business mission of offering the "Best Quality" and "Best Price" to its customers, source a diversified range of global food products for customers, strive to expand its product range in a meticulous manner to meet the daily needs and necessities of the local community, and further develop the Group's private label products to enrich customers' choices. The Group will also continue to carefully control the procurement costs of the Group's products to maintain its price competitiveness.
The Board is of the view that business diversification can effectively expand the Group's income stream and generate satisfactory returns for the shareholders of the Group. The retail network of "FoodVille", the Group's new global gourmet store, will continue to be expanded in the future to satisfy the needs of different customer groups for healthy lifestyle and quality food, targeting large and medium-to-high-end shopping malls in Hong Kong as well as stores with larger area and locations with high customer traffic and population density.
In addition, the Group will further expand its business from the business-to-customer (B2C) segment to business-to-business (B2B) segment with an expectation of wholesaling the Group's private label products and other imported products to not only other retailers in Hong Kong but also other enterprises in overseas markets, with a view to generate more stable income streams for the Group.
The Group has established a wholly foreign-owned enterprise in Shenzhen, and sent our Hong Kong-based staff to set up a formal office in Futian District, Shenzhen, in April 2021 to commence staff recruitment and preliminary work for the opening of chain retail stores. The Group expects to officially open its first retail store in Shenzhen at the end of 2021, marking the Group's first presence in the Mainland China market, with the objective of expanding its operating model to other cities in the Greater Bay Area, thereby extending the Group's sales network to the whole nation.
About Best Mart 360 Holdings Limited
Best Mart 360 Holdings Limited, mainly operates chain retail stores under the brand "Best Mart 360˚". It offers wide collection of imported prepackaged leisure foods and other grocery products, principally from overseas. The Group's business objective is to offer "Best Quality" and "Best Price" products to customers through continuous efforts on global procurement with a mission to provide comfortable shopping environment and pleasurable shopping experience to customers. As at 30 September 2021, the Group operates 129 retail stores that are strategically located at 18 districts in Hong Kong and Macau. In addition, the Group's new global gourmet store, "FoodVille", was officially opened in September 2021, which mainly provides globally sourced medium-to-high-end quality food products.
SOURCE Best Mart 360
Company Codes: HongKong:2360
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