2005 Sep 09
AEON Stores (Hong Kong)

AEON STORES ANNOUNCES 2005 INTERIM RESULTS NET PROFIT SURGES 24% TO HK$36 MILLION　FURTHER EXPAND RETAIL NETWORK IN HONG KONG & THE PRC TO DRIVE FUTURE GROWTH

(HONG KONG, 9 September 2005) - AEON Stores (Hong Kong) Co., Limited ("AEON Stores" or the "Company") (Stock code: 984) and its subsidiaries (the "Group") today announced its unaudited interim results for the six months ended 30 June 2005.

This is the Group's first interim results after it changed its financial year end date from end of February to 31 December. For the period ended 30 June 2005, the Group's turnover increased 16% to HK$2,606 million compared with HK$2,243 million for the six months ended 31 August 2004. The rise in turnover was mainly due to the increase in sales of its existing stores and the growth strategies of expanding its retail network through opening more GMS and JUSCO $10 Plaza as well as diversifying into the new business mode of operating an independent supermarket. Gross profit margin was recorded at 24.8%. Profit for the period grew 24% to HK$36 million. The satisfactory results were mainly attributable to the outstanding performance of the Group's stores in Hong Kong.

The Board of Directors has recommended the payment of an interim dividend of 5.5 HK cents (2004: 4.0 HK cents).

During the period, the Group maintained a healthy financial position with no bank borrowings and net cash balances of HK$720 million as at 30 June 2005 (31 December 2004: HK$776 million). Staff costs against turnover dropped from 9.1% to 8.2% while rental costs against turnover fell from 8.4% to 8.0%.

Mr. Naoyuki Miyashita, Managing Director of AEON Stores, said, "We are pleased to announce our satisfactory results for this interim period. Benefiting from the declining unemployment rate, the reviving property market and the PRC Government further relaxing the Individual Travellers Scheme, the local economy has been booming, which in turn enhanced consumption sentiment. During the review period, we ventured into independent supermarket operation. In April 2005, we opened our first supermarket in Hong Kong detached from our GMS, marking our strategic attempt to diversify our business mode."

The Group's Hong Kong sales rose 12% to HK$1,822 million while profit for the period increased 127% to HK$41 million. Apart from opening its first independent supermarket in apm in Kwun Tong, the Group partially closed its Tai Po Store for renovation in May 2005. The newly renovated store adopts the "Home Sweet Home" concept, which better caters for the needs of the working couples and nuclear families in Tai Po. The store resumed full operation in early August.

The Group's PRC turnover recorded a rise of 28% to HK$784 million, compared with HK$612 million for the six months ended 31 August 2004. The PRC segment nevertheless recorded a loss of HK$6 million mainly because the Group's two newly opened stores in Foshan and Shenzhen were still at their initial stages of operations and the operating expenses of AEON China also increased.

Subsequent to the period end date, in August 2005, the Group opened two more independent JUSCO $10 Plaza in Hong Kong, one in Tsuen Wan and the other in Wan Chai. Besides, the Group opened its third store in Shenzhen, the Dragon Hill Store in September 2005, and another GMS is scheduled to open in Shunde in 2006.

Mr. Naoyuki Miyashita concluded, "Backed by our solid foundation, we are well-positioned to fully seize the enormous opportunities ahead and we will continue to look for suitable locations in Hong Kong to open more new GMS, JUSCO $10 Plaza and independent supermarkets. As for the PRC market, we expect the economy to continue to flourish and the consumption power of the local people to remain strong. In view of this, we are determined to further penetrate the PRC market by expanding our business network with the aim of capturing arising lucrative opportunities. The Group will also strive to control merchandise costs and the operating expenses to improve its operations in the PRC."        

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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 merchandise stores (GMS). Currently, it operates 10 GMS, 2 independent supermarkets, 33 independent Living PLAZA by AEON, 30 independent Daiso Japan, 1 independent Bento Express by AEON and 4 Mono Mono and 3 KOMEDA'S Coffee in densely populated districts in Hong Kong. It also operates 21 GMS and 15 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