2001 May 18
AEON Stores (Hong Kong)

JUSCO Announces 2000/2001 Annual Results Profit Upsurges By 2.8 Times To HK$92 Million

BOTH PRC AND HONG KONG OPERATIONS RECORD SATISFACTORY PERFORMANCES

(HONG KONG, 18 MAY 2000) - General Merchandise Stores (GMSs) operator JUSCO Stores (Hong Kong) Co., Limited (Stock code: 984) and its subsidiaries ("JUSCO" or the "Group") today announced the audited consolidated results for the year ended 28 February 2001. The Group's turnover increased by 3.6% to HK$3,394 million in comparison to last year's figure of HK$3,277 million. During the year under review, the Group managed to set a new profit record of HK$92 million, 2.8 times last year's figure of HK$32 million. Earnings per share were 35.48 HK cents (2000: 12.51 HK cents).

The Board of Directors has recommended a final dividend of 13.0 HK cents (2000: 4.0 HK cents) per share. The total dividend for the year will be 14.0 HK cents (2000: 4.0 HK cents) as an interim dividend of 1.0 HK cents was declared during the year.

Mr. Sozaburo Yamazaki, Managing Director of JUSCO Stores (Hong Kong) Co., Limited, said, "We are delighted to report the satisfactory results despite the temporary closure of our Kornhill Store for renovation for four months. This outstanding achievement was mainly attributable to our disciplined cost management and the efforts to enrich our merchandise mix."

During the year under review, the Group continued its negotiations with landlords for favourable terms in its leasing contracts. In addition, the Group has managed to decrease its interest expense from HK$5.9 million to HK$1.2 million while interest income increased from HK$1.3 million to HK$4.8 million.

The Hong Kong economy further revived from the downturn following the Asian financial turmoil. According to statistics, total retail sales in 2000 reached HK$186.7 billion. The value and volume indices grew by 3.8% and 8.1% respectively. However, global demand slackened substantially in the latter half of 2000. Consequently, the retail market suffered from a cautious spending attitude and from customers seeking value-for-money goods and services.

JUSCO recognizes that total customer satisfaction is the critical factor in contributing to its success and to the maintaining of its leadership position in the retail industry. Mr. Yamazaki explained, "Achieving high customer satisfaction is our prime emphasis. We have operated in the local retail industry for over 14 years and are committed to enriching our merchandising mix in addition to providing high standard customer services which are essential to attract and retain a loyal customer base. We are very optimistic in the prospects of the retail industry as we expect consumers’ purchasing power to gradually increase after three to six months in view of the several rounds of interest cuts experienced in the past few months."

During the year under review, JUSCO renovated its flagship store in Hong Kong - the Kornhill Store - introducing the up-to-date GMS concept from Japan with the emphasis on a more comfortable shopping environment for customers. The total renovation costs for the Kornhill Store were approximately HK$90 million. This was mainly financed by internal resources and short-term bank borrowings. The re-opened Kornhill Store has been proven to be even more successful in Hong Kong.

To share the success of the Kornhill Store, the Lok Fu Store is under renovation and expansion and will be re-opened in June 2001. The total leasing area is approximately 148,000 square feet with total renovation costs of approximately HK$63 million. Of this sum, HK$10 million was incurred in this financial year while the remaining HK$53 million will be incurred in the next financial year. All expenses are financed by internal resources.

Apart from the Hong Kong operation, the Group's second GMS - China Plaza Store - in Guangzhou, the PRC commenced operation in June 2000. The total investment costs of the China Plaza Store approximated HK$33 million and were financed by internal resources mainly as well as short-term bank borrowings. The two GMSs in Guangzhou recorded an outstanding performance with an increase of 52% in turnover during the year under review.

In view of the tremendous potential of the retail market in the PRC and as there is no GMS in Shenzhen, the Company signed a Letter of Intent on 29 March 2001 with interested parties in the PRC to explore opportunities for the development of GMS in Shenzhen.

Mr Yamazaki continued, "Apart from providing a comfortable shopping environment for our valued customers, we are committed to ensuring that customers enjoy a diverse merchandise mix. Thus we provide more than 500 items which are sourced from Japan and carry our own brandname, "Top Valu". In addition, two "$10 Plazas" were opened in the Tuen Mun and Tseung Kwan O Stores during the year. We are committed to enhancing our shopping environment, enriching the merchandise mix as well as to providing quality customer services to satisfy our valued customers needs."

In December 2000, JUSCO introduced an on-line virtual shopping mall concept, JUSCOCITY (www.juscocityhk.com). JUSCOCITY provides valuable information regarding JUSCO Stores and the community and serves as a platform to facilitate effective communication between JUSCO and its customers.

Looking to the future, Mr. Yamazaki, said, "We established the Customer Service & Store Support Department and the Service Improvement Team in April 2001, aiming to enhance customer relationships and cater for our client's needs and expectations. We will provide continuous training to our staff as well as introduce a "Service Ambassador Programme" to recognise staff for their remarkable achievements in customer service. Achieving total customer satisfaction will remain our principle mission in the years to come."

Mr. Yamazaki concluded, "With the goal of achieving total customer satisfaction in mind together with a well-mapped out development plan, we look forward with confidence to fulfilling the needs of our customers. Building on our sound financial position and the sizable operations of our 10 GMSs in Hong Kong and the PRC, we are geared to pursue arising opportunities as the economy and retail market continue to improve."
 

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About AEON Stores
AEON Stores was established in Hong Kong in 1985 and listed on the Hong Kong Stock Exchange in 1994. The Group is mainly engaged in the operation of general retail businesses (General Merchandise Stores and Independent Supermarkets). Currently, it operates 10 GMS, 2 independent supermarkets, 31 independent Living PLAZA by AEON, 31 independent Daiso Japan, 4 Mono Mono, 4 KOMEDA'S Coffee and 1 JELYCO DO By KOMEDA'S Coffee in densely populated districts in Hong Kong. It also operates 21 GMS and 17 independent supermarkets in Guangdong Province, the PRC.

For more information：
AEON Stores (Hong Kong) Co., Limited
Corporate Communication Department
Tel.：（852）2165 0777
Email：aeonpr@aeonstores.com.hk