2018 Aug 20
AEON Stores (Hong Kong) Co., Limited

AEON Stores Announces 2018 Interim Results; Revenue Reached Half Year Record High

AEON Stores (Hong Kong) Co., Limited ("AEON Stores" or the "Group") (Stock code: 984) announced its 2018 interim results today. During the period, the Group continued to actively carry out internal business restructuring and cost control, focusing on improving customer experience and operation standards, and at the same time has accelerated digital marketing activities to cement its foundation for supporting future growth. For the six months ended 30 June 2018, the Group's revenue hit a half-year record high of HK$4,929.8 million, representing a year-on-year increase of 6.7%. Despite the persistently high operating costs, the Group's profit before tax has improved by HK$32.1 million and substantially narrowed its loss to HK$38.5 million during the period.

The Board has maintained a stable dividend payment to shareholders and recommended payment of an interim dividend of HK22.0 cents per share.

Hong Kong Operations

Boosted by the effective sales strategy, the Group's Hong Kong segment recorded revenue growth of 8.1% to HK$2,201.3 million and thus Hong Kong segment results significantly improved by HK$49.5 million and loss of its Hong Kong operation narrowed to HK$36.6 million.

Improvement in Hong Kong segment results was largely due to improvement in performance of the "AEON STYLE" business model, merchandise mix adjustment and the adoption of clear operations guidance, in order to control different operational costs.

PRC Operations

The Group's PRC segment revenue rose by 5.6% to HK$2,728.5 million, benefited from the Group's customer relationship management ("CRM") system launched last year. The CRM system introduced big data analysis to strengthen its sales and marketing, leading to continued increase in sales from members. During the period under review, the Group reviewed its store portfolio in a timely manner, opening a store in Foshan. and closing a store in Shenzhen. As the newly-opened stores are still in cultivation stage, plus the additional costs of store closures, the results of the PRC operations, however, reported a loss of HK$13.7 million during the period.

Prospects

Looking ahead, the Group continue to implement various measures to improve operational efficiency in Hong Kong. About the store portfolio, the Group will maintain the strategy of opening small specialty stores and strengthening the development capacity of its stores. The Group expects at least five stores to be opened in the second half of 2018. It also plans to incorporate part of the "AEON STYLE" elements into existing stores, in order to provide a better shopping experience for customers. With proven strategies in place, the Group looks forward to continued improvement of the Hong Kong operations in the near future.

Regarding the PRC operations, as the Group has entered the PRC market for 20 years, it is facing the challenges of aging stores and leases renewal. As such, besides opening new stores in a stable manner, it is also important to raise the profitability of existing stores. In the second half of the year, a new store will be opened in Guangzhou and Zhuhai, respectively. Besides, based on the success of the "AEON STYLE" initiative in Hong Kong, the Group also plans to renovate the Shenzhen East Lake store into the first "AEON STYLE" in China during the second half of the year, with the aim to offer a brand new shopping experience for local customers.

Ms Yuki Habu, Chairman and Managing Director of AEON Stores (Hong Kong) Co., Limited added, "Apart from reviewing and adjusting current business operations, we are also proactively examining market developments and introducing new elements to different aspects of our business. In view of the emergence of 'New Retail' in recent years, including the rising popularity of online shopping, we have recently partnered with JD.com and initiated trials of the 'Cloud Warehouse'(雲倉) O2O retail business model in Shenzhen and Shunde, which targets to provide daily necessities including fresh products. If the trial run delivers satisfactory results, we will expand the coverage of this business model to communities with high-growth potential so that more consumers can enjoy the Group's quality products without leaving their home. At the same time, we are cooperating with Weixin and other co-manufacturers to launch a smart retail store in the near future, aiming to bring customers a new retail experience."

Financial Summary

	Six Months Ended 30 June
	2018 HK$'000(Unaudited)	2017 HK$'000(Unaudited)
Revenue	4,929,803	4,620,696
Loss after tax	(43,413)	(71,280)
Dividend per share - Interim	22.0 HK cents	20.0 HK 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