2001 Oct 23
AEON Stores (Hong Kong)

JUSCO ANNOUNCES 2001 INTERIM RESULTS PROFIT INCREASES BY 99% TO HK$15.3 MILLION ENLARGES MARKET PRESENCE IN HONG KONG AND PRC BY ESTABLISHING MORE GMSS

(HONG KONG, 23 October 2001) - General Merchandise Stores (GMSs) operator JUSCO Stores (Hong Kong) Co., Limited ("JUSCO" or the "Company") (Stock code: 984) and its subsidiaries (the "Group") today announced its unaudited consolidated results for the six months ended 31 August 2001.

The Group's turnover increased by 20% from HK$1,440 million to HK$1,723 million when compared with the corresponding period in the previous year. Profit attributable to shareholders increased by 99% from HK$7.7 million to HK$15.3 million. Earnings per share were 5.87 HK cents. The surge in turnover and profit is mainly attributable to the 6 months operation of the Kornhill Store in Hong Kong and the China Plaza Store in Guangzhou City for the period ended 31 August 2001, compared to only 2 months operation for the Kornhill Store and 3 months for the China Plaza Store in the same period last year. In addition, the adoption of effective cost controls as well as the success of the diversified merchandise mix also contributed to the positive results.

The Board of Directors has recommended an interim dividend of 2.0 HK cents (2000: 1.0 HK cents).

Mr. Sozaburo Yamazaki, Managing Director of JUSCO Stores (Hong Kong) Co., Limited, said, "We are pleased to report growth in both turnover and profit despite the stagnant market sentiment for the retail market for the first half of 2001. Our effective cost controls as well as the richer merchandise mix also contributed to this positive growth. In the years to come, we will continue with these strategies to further consolidate our leading market status."

The gross profit margin maintained at 27.8% for the six months ended 31 August 2001. The rental cost against turnover increased slightly from 8.7% to 9.4%. Staff cost against turnover decreased from 11.0% to 10.6% for the period under review. As at 31 August 2001, the Group maintained a healthy financial position with a net cash balance of HK$236 million and no bank borrowings.

Mr. Yamazaki continued, "With sufficient cash on hand, we are able to capture the opportunities ahead to further accelerate our business growth. The renovation and expansion of the Lok Fu Store is a prime example. Total investment costs were all financed by internal resources."

The newly renovated and expanded Lok Fu Store commenced operation in June this year. Apart from introducing the up-to-date GMS concept as in the Kornhill Store, the Group continues to introduce a wide range of merchandise including the most popular Japanese food items. The supermarket in the Lok Fu Store has almost doubled in size to 16,000 sq. ft. More fresh food, produce and Japanese merchandise are being introduced, allowing customers to have an enjoyable shopping experience.

Apart from the success of the Hong Kong operation, the Groups' two GMSs in Guangzhou, the Teem Plaza Store and the China Plaza Store, also recorded stable growth during the review period. Sales increased by 35% and profit from operation before taxation increased by 77%. The two GMSs are next to the Guangzhou Metro railway stations which attract high traffic volumes.

In view of the huge market potential and the promising prospects of the PRC, the Group entered an agreement with Shenzhen Centralcon The City Plaza Co. Ltd. and Shenzhen Modern Friendship Co., Ltd. to set up its third GMS, Shenzhen JUSCO Friendship Stores Co., Ltd., in the PRC in August 2001. "With a population of four million, the constantly improving living standards and comprehensive infrastructure development, Shenzhen is emerging as a market with huge potential for JUSCO. The Shenzhen Store is expected to commence operations in the third quarter of 2002. We have full confidence that the new GMS in Shenzhen will generate a positive contribution to the Group in the future," commented Mr. Yamazaki.

In view of the negative impact on the global economy induced by the tragic attacks in the US in September, together with the worsening market environment in Hong Kong, the management expects local consumer spending to further hang back. The retail market in turn will take a longer period of time to recover. However, the Group will keep on introducing a wider range of product mix and continue to adopt effective cost control to enhance its competitiveness. In addition, the Group will consider further expansion of its market presence by establishing more GMSs in both the PRC and Hong Kong when market conditions are favourable and prime locations become available.

CONDENSED CONSOLIDATED INCOME STATEMENT For the six months ended 31 August 2001
	(Unaudited) Six months ended
	31 August 2001	31 August 2000
	HK$'000	HK$'000
Turnover	1,722,783	1,439,896
Other revenue	98,714	91,854
Changes in inventories	(1,243,926)	(1,041,621)
Staff costs	(181,696)	(158,434)
Depreciation	(40,165)	(36,509)
Pre-operating expenses	-	(453)
Other operating expenses	(331,575)	(284,057)
Profit from operations	24,135	10,676
Finance costs	(93)	(1,129)
Investment income	2,827	1,395
Profit before taxation	26,869	10,942
Taxation	(7,718)	(1,469)
Profit before minority interest	19,151	9,473
Minority interest	(3,883)	(1,811)
Net profit for the period	15,268	7,662
Dividends proposed	5,200	2,600
Earnings per share	5.87 cents	2.95 cents

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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