2007 Apr 04
AEON Stores (Hong Kong)

AEON STORES ANNOUNCES 2006 ANNUAL RESULTS　PROFIT ROSE BY 19% TO HK$148 MILLION

(HONG KONG, 4 April 2007) - AEON Stores (Hong Kong) Co., Limited ("AEON Stores" or the "Company") (Stock code: 984) and its subsidiaries (the "Group") today announced the results for the year ended 31 December 2006.

The Group's revenue grew by 9% to HK$4,287 million (2005: HK$3,920 million) mainly driven by the sales growth of the PRC stores. Gross margin slightly decreased from 35.3% to 34.7% as the Group enlarged its food segment. The opening of additional independent supermarkets also placed a greater emphasis on the food sector, hence affecting the Group's gross margin. Profit attributable to shareholders increased by 19% to HK$148 million (2005: HK$125 million). Earnings per share were 57.06 HK cents (2005: 47.90 HK cents).

The Board of Directors proposed the payment of a final dividend of 17.5 HK cents (2005: 14.0 HK cents) per share. Together with an interim dividend of 5.5 HK cents paid earlier, the total dividend for the year will be 23.0 HK cents (2005: 19.5 HK cents) per share.

Staff costs and rental costs against revenue were at 11.3% and 10.6% (2005: 11.4% and 9.8%) respectively. As at 31 December 2006, the Group maintained a net cash position with bank balances and cash of HK$1,541 million (2005: HK$1,042 million) and short-term bank loans of HK$60 million (2005: HK$14 million).

Mr. Lam Man Tin, Managing Director of AEON Stores, said, "2006 was a particularly auspicious year for us. Strong retail market sentiment in the PRC and steady growth in Hong Kong provided a positive backdrop for the Group's business. The steady progress achieved by the Group in 2006 has added to the positive spirit of the Group as we celebrated our 20th anniversary in Hong Kong in 2007."

The Group's revenue in Hong Kong rose by 5% to HK$2,903 million (2005: HK$2,770 million) when compared with last year, attributable to the favourable conditions in the retail industry. Profit grew by 16% to HK$195 million (2005: HK$168 million). In September 2006, the Group opened its second independent supermarket at the Kai Tin Shopping Centre in Lam Tin following the success of the first JUSCO Supermarket opened in apm. In addition, the Group further strengthened the JUSCO $10 Plaza network with the opening of two more outlets in Fanling and Shamshuipo, and the JUSCO $10 Plaza Kowloon flagship store in Mongkok, bringing the total number of JUSCO $10 Plaza to eleven. To keep pace with the changing needs of the customers and the community, GMS in Whampoa was partially closed for renovation in April 2006, and now it boasts an enlarged Supermarket, Fashion, Household and Furniture sections.

The Group's operations in the PRC reported revenue at HK$1,384 million (2005: HK$1,150 million), up 20% from last year, mainly propelled by the satisfactory store performance. The Dragon Hill Store also contributed to the PRC sales with its operation for a full financial year. Some of the stores, however, were still in the investment stage of development, thus affecting profit contributions. Nonetheless, the PRC operations generated a profit of HK$14 million (2005: HK$5 million loss).

Looking ahead, the Group is cautiously optimistic about its Hong Kong operations for the near future, as Hong Kong's economy appears to be on the way back to steady growth. Following the success of the first two JUSCO Supermarket outlets, a third supermarket is scheduled to open in the Grand Waterfront Plaza, Tokwawan by mid-2007. It will be the largest of its kind in the district and will be fully capable of catering the daily needs of customers. Moreover, the Group will continue its efforts to offer a diverse range of high quality products to customers by introducing "TOPVALU" private brand which covers broad spectrum of goods to the stores. The Group will also search for suitable locations to open more new stores especially JUSCO $10 Plaza and JUSCO Supermarket outlets, and will even consider opening new stores operated under new business models when opportunities arise.

In the PRC, the GDP continued to improve and consumers were more motivated to shop, not only for daily necessities, but also for quality products and services. Under AEON China, AEON Shunde Shopping Centre with a GMS started operation in January 2007. The Shopping Centre represents the first complex of its kind operated under the Group. In addition to the 18,500 sq. m. GMS, the Shopping Centre houses 93 retail outlets of which 40% are new faces to Shunde, offering a pleasurable one-stop shopping experience to customers. The Group will also launch the first independent supermarket and one additional GMS in Shenzhen in April and late 2007 respectively to further enhance JUSCO's brand status in southern China.

"As we embark on further expansionary activities, we understand the importance of preserving the 'everything we do, we do for our customers' ethos. We will continue our efforts to respond promptly to the needs and concerns of customers, thus providing excellent products and services that exceed all their expectations!" concluded Mr. Lam.

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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