HONG KONG, Aug 26, 2010 - (ACN Newswire) - Emperor Watch & Jewellery Limited (the "Group")(SEHK: 0887), a leading luxury watch and jewellery retailer, has announced results for the six months ended 30 June 2010.
The Group is a leading retailer of mainly European made luxurious watches and selfdesigned fine jewellery products in Hong Kong, Macau and China with over 60 years' history. Its target customers range from middle to high income earners from all over the world.
The Group has an extensive network of retail outlets at prime locations in Hong Kong, Macau and China. These include multi-brand stores as well as specialty outlets for specific brands, which enable the Group to reap synergies with international watch brand suppliers, as well as foster loyalty among customers attracted to specific watch brands.
FINANCIAL REVIEW
The Group's growth momentum in 2009 carried on to the first half of 2010. For the Period, it reported revenue of HK$1,773.3 million, representing a 85.8% increase from the same period last year (2009: HK$954.3 million). Its profit attributable to shareholders before fair value losses in derivative financial instruments amounted to HK$128.5 million, demonstrating a strong upward thrust. After taking into account such fair value adjustment, the profit attributable to shareholders was HK$98.3 million (2009: HK$51.1 million).
Global economic environment has continued to improve ever since the end of the financial tsunami in mid 2009. It was best reflected in tourism statistics. Tourist arrivals from China rose by 26.9% coincidentally for both Hong Kong and Macau in the first six months of 2010. This brought very positive effects to the Group's revenue from Hong Kong and Macau, which were HK$1,438.3 million (2009: HK$797.6 million) and HK$126.7 million (2009: HK$74.6 million) respectively. The Group achieved even more encouraging performance in China, with a 153.8% increase from revenue of HK$82.1 million in the same period last year to HK$208.3 million, mainly attributable to the growth in its retail network.
FINANCIAL HIGHLIGHTS
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HK$'000 Six months ended 30 June
(unaudited) 2010 2009
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Revenue by segments:
-- Hong Kong 1,438,317 797,655
-- Macau 126,685 74,566
-- PRC 208,275 82,065
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1,773,277 954,286
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Revenue by products:
-- Watch 1,528,443 826,230
-- Jewellery 243,968 128,056
-- Others 866 --
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1,773,277 954,286
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Profit before fair value losses in
derivative financial instruments 128,458 51,133
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Profit for the period attributable
to the owners of the Company 98,273 51,133
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Earnings per share
-- Basic HK1.9 cents HK1.1 cents
-- Diluted HK1.9 cents N/A
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BUSINESS REVIEW
Expansion and Optimization of Retail Network
5 new stores were opened during the Period, including 1 in Hong Kong and 4 in China. As at 30 June 2010, the Group has 12 stores in Hong Kong, 4 in Macau, 28 in mainland China and all together 44 stores.
With its well established brand awareness in the Chinese community crafted over the past decades, the Group has a vision to build a mecca of fine watches and jewellery in Hong Kong for people with refined taste from China and all over the world. During the Period, the Group has been aggressively strengthening its presence in prime shopping areas in Hong Kong. Its stores are now most densely packed in Russell Street, Causeway Bay, which is the territory's number one high end shopping street comparable to Champs Elysees in Paris and Fifth Avenue in New York. During the Period, the Group expanded one of its 4 stores on the street from 2,112 square feet to 3,142 square feet, totaling 8,248 square feet.
Notwithstanding the intense presence in Russell Street, the Group's strongest foothold is in Tsim Sha Tsui, another major tourist spot and shopping area, with its 6 stores, one of which was opened during the Period. Led by its iconic megastore at 1881 Heritage, the 6 stores are strategically situated in Canton Road, Nathan Road and a new upscale shopping mall, capturing the spending power of most local shoppers and tourists on a shopping spree.
The Group also saw a rapid growth in its China retail network, now covering nearly 10 cities. While the majority of the stores are located in Beijing and Shanghai, the Group also tapped other fast developing cities in various parts of China. Such spectrum of locations was meticulously devised and is continuously adjusted for a diverse and comprehensive blend of financial returns, marketing benefits and strategic advantages.
All 5 new stores opened during the Period are dedicated to jewellery, as part of the Group's plan to allocate more resources to jewellery business for a better equilibrium in its dual business model.
Brand Recognition and Effective Marketing Programme
During the Period, besides its regular marketing activities, the Group made extra efforts in some novelty marketing tactics jointly staged with other subsidiaries of Emperor Group. These included a public relations event co-organized in Emperor Jewellery Flagship Store in 1881 Heritage with Emperor International Holdings Limited to promote "Habour One", its property development project, during which the Group sponsored jewellery for all attending artistes from Emperor Entertainment Group. The Group also invited VIP guests to a movie premiere of "Triple Tap", a production of Emperor Motion Pictures. This was consistent with Emperor Group's traditional emphasis on synergy among its highly diversified business units and therefore more economic use of resources.
With its mainland arm steadily growing, the Group also invested substantially in various marketing activities in China during the Period, stretching from print ads, concert sponsorship, to co-op events with watch brands and banks. Ms. Cindy Yeung, Management Director, was featured in a number of media interviews as a soft and subtle brand building campaign to endow the Group with a humanized personality.
Prospects
The Group remains positive on the prospects of the luxurious watch and jewellery retail market for the year ahead. After a whole year of fast global economic recovery, the Group expects to reap even richer harvest in the coming months.
The Group will continue to strategically enlarge its retail territory. Its strong base in Tsim Sha Tsui is expected to be further reinforced by 1 jewellery store and 1 Rolex and Tudor boutique in Ocean Terminal, Harbour City, one of the biggest and the most longstanding shopping malls in Hong Kong.
Whereas in China, subsequent to the Period, 2 new jewellery stores were opened, to be followed by 3 more soon. With 4 new jewellery stores on the way, the Group is gradually realizing its plan to adjust the balance between watch and jewellery businesses.
In line with the positive outlook, the Group will soon launch a whole new round of marketing campaign, including a new TV commercial and other supporting marketing collaterals, to sustain the Group's brand recognition.
Looking ahead, apart from its continuous endeavor in marketing and expansion, the Group will strive to develop closer relationships with its strategic investors, other subsidiaries of Emperor Group as well as business associates in the industry. The Group considers such intangible assets will be a leverage to its future efforts in increasing its market share particularly in China, a market which is too big to act alone.
To access the complete report, please go to the following PDF: www.emperorwatchjewellery.com/shape_downloads/e0887%202010.08.25.pdf
Contact:
Emperor Group,
Corporate Communications Department
Catherine Liu, +852 2835 6776, catherineliu@emperor.com.hk
Alice Chek, +852 2835 6786, alicechek@emperor.com.hk
Topic: Earnings
Source: Emperor Watch & Jewellery Limited
Sectors: Retail & eCommerce, Daily Finance
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