EMPEROR WATCH & JEWELLERY LTD.

2018 NET PROFIT SURGES 68% TO HK$269 MILLION

Mar 20, 2019

ADJUSTS BUSINESS STRATEGIES TIMELY
STRENGTHENS FOOTHOLD PROACTIVELY

Results Highlights: 

HK$ million 2017 2018 Changes
Revenue 4,075 4,722 + 15.9%
Gross profit 1,089 1,305 + 19.8%
Gross profit margin 26.7% 27.6% + 0.9pp
Net profit
    - Per reported
    - Adjusted *

160
160

264
269

+ 65.0%
+ 68.1%
Net profit margin
   - Per reported
   - Adjusted *

3.9%
3.9%

5.6%
5.7%

+ 1.7pp
+ 1.8pp
Basic earnings per share HK2.32 cents HK3.87 cents + 66.8%
Total dividends per share HK0.75 cent HK1.25 cents + 66.7%
* Excluding a depreciation charge of HK$4.8 million (2017: Nil) on the Group’s self-owned store at Nos. 4-8 Canton Road, Tsim Sha Tsui, Kowloon


(Hong Kong, 20 March 2019) Emperor Watch & Jewellery Limited (the “Group” or “Emperor W&J”) (Stock code: 887), a leading retailer of European-made watches and fine jewellery, is pleased to announce its annual results for the year ended 31 December 2018 (the “Year”).

Driven by the robust growth in the luxury consumption market in the first half last year, the Group achieved satisfactory performance during the Year. The Group’s total revenue increased by 15.9% to HK$4,722 million (2017: HK$4,075 million). Watch segment remained the largest revenue contributor, with revenue grew by 13.1% to HK$3,664 million
(2017: HK$3,239 million), accounting for 77.6% (2017: 79.5%) of the total revenue. As a result of an expanded “Emperor Jewellery” store network plus successful marketing strategies, revenue from the jewellery segment increased by 26.6% to HK$1,058 million (2017: HK$836 million). Stable growth has been recorded in Hong Kong market, with revenue increased by 19.6% to HK$3,643 million (2017: HK$3,047 million), accounting for 77.1% (2017: 74.8%) of the total revenue.

Gross profit rose 19.8% to HK$1,305 million (2017: HK$1,089 million). The gross profit margin increased to 27.6% (2017: 26.7%), attributable to stronger market demand for watches. Due to an improved gross profit and disciplined control over the operating and administrative expenses, net profit of the Group surged 65.0% to HK$264 million (2017:
HK$160 million). Subsequent to the completion of the acquisition of the flagship store at Nos. 4-8 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong by the Group as a self-owned store in December 2018, a depreciation charge of HK$4.8 million (2017: Nil) was incurred. Excluding such depreciation charge, the adjusted net profit rose 68.1% to HK$269 million (2017: HK$160 million). Basic earnings per share was HK3.87 cents (2017: HK2.32 cents). The Group has recommended the payment of a final dividend of HK0.55 cent (2017: HK0.58 cent) per share. Together with the interim dividend of HK$0.70 cent (2017: 0.17 cent) per share, the total dividends for the Year are HK1.25 cents (2017: 0.75 cent) per share.

As at 31 December 2018, the Group operated 95 stores (31 December 2017: 80) in Hong Kong, Macau, mainland China, Singapore and Malaysia. During the Year, six “Emperor Jewellery” stores were opened in Hong Kong, all of which are located in shopping malls with heavy foot traffic, such as Telford Plaza in Kowloon Bay, APM in Kwun Tong and MOSTown in Ma On Shan.

The Group continued to enrich its product offerings in an effort to penetrate the affordable luxury jewellery segment. During the Year, signature collections were launched including new “Yo Yo” Collection featuring unisex designs, “Mini Me” mother-and-baby pendant sets, “One Vow, Two Love” Bridal Collection, “Emperor Jewellery x Joey Yung Heartbeat” Collection and Chinese Wedding Fine Gold Collection, etc, all of which were well received by the market. The Group also launched the “Nuò by Cindy Yeung”, the new high jewellery brand led by Ms. Cindy Yeung, Chairperson & Chief Executive Officer of Emperor W&J, which embodies perfect artwork imbued with boundless creativity and passion, delivering an extraordinary experience. With the meaning “promise”, the word “Nuò” is taken from the Putonghua pronunciation of a Chinese character in the names of Ms. Yeung and her daughter, which also symbolises a distinctive family lineage that continues through generations.

Ms. Cindy Yeung said, “As a result of the macro-economic headwinds, the growth pace of the retail market has been moderated since the second half last year. Nevertheless, the Group adhered to its responsive and flexible strategies, adjusted its business plans according to the market environment, and strictly controlled its operating and administrative costs to remain its competitiveness, the Group managed to achieve satisfactory results during the Year.”

Ms. Yeung continued, “Unfavourable external factors would continue to pose threats to the industry in the near-term, the Group would stay alert and respond to market change proactively. Against the backdrop of rising income levels and people’s pursuit of quality of life, and riding on its “Emperor” brand established in the past decades and its widely recognised leading retailer position, we are confident about the development prospects of the watch and jewellery sector and the Group.”

- End -

About Emperor Watch & Jewellery Limited
With long establishment history of over 75 years in Hong Kong since 1942, Emperor W&J (887.HK) is a leading retailer principally engages in the sale of European-made internationally renowned watches, and self-designed fine jewellery products under its own brand, “Emperor Jewellery”. Through its comprehensive watch dealership, unique marketing campaigns and extensive retail network at prime locations in Hong Kong, Macau, mainland China, Singapore and Malaysia, Emperor W&J established a strong brand image amongst its target customers ranging from middle to high income groups worldwide. In recognition of its efforts in investor relations communications, Emperor W&J was granted with “Best IR Company” (Small Cap) and “Best IR Presentation Collaterals” (Small Cap) in HKIRA Investor Relations Awards 2018 by the Hong Kong Investor Relations Association. For more information, please visit its website: www.emperorwatchjewellery.com.
 

Investor/Media Enquiries

Anna Luk
Group Investor Relations Director
Emperor Group
Tel: +852 2835 6783
Email: annaluk@emperorgroup.com

Winnie Kwong
Group Investor Relations Manager
Emperor Group
Tel: +852 2835 6791
Email: winniekwong@emperorgroup.com


 

(From Left to Right) Ms. Anna Luk, Group Investor Relations Director of Emperor Group; Ms Cindy Yeung, Chairperson and Chief Executive Officer of Emperor Watch and Jewellery and Mr. Benson Chu, Group Chief Financial Officer of Emperor Group

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