2002 Oct 25
AEON Stores (Hong Kong)

JUSCO ANNOUNCES 2002 INTERIM RESULTS

ENLARGES MARKET PRESENCE IN HONG KONG AND PRC
BY ESTABLISHING MORE GMS

(HONG KONG, 25 October 2002) - General Merchandise Stores (GMS) 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 2002.

The Group's turnover increased by 4.6% from approximately HK$1,723 million to about HK$1,801 million when compared to the corresponding period in the previous year. This increase in turnover demonstrates the Group's successful market diversification strategies, growing product mix and value pricing. The Group has successfully implemented its operating philosophy, providing value-added products to meet customer needs. However, due to the increase in rental expenditures, pre-operating expenses incurred for new stores and tax expenses, profit attributable to shareholders was about HK$3.6 million for the period under review (2001: about HK$15.3 million).

The Board of Directors does not recommend the payment of any interim dividend for the six months ended 31 August 2002 (2001: 2.0 HK cents).

Mr. Kazumasa Ishii, Managing Director of JUSCO, said, "The poor economy during the period under review has created a very challenging business environment for the entire retail industry. However, leveraging our effective cost controls as well as our enhanced merchandise mix, we are able to report positive growth in our sales. In the years to come, we will continue with these strategies to maintain our growth and further consolidate our leading market status."

Despite Hong Kong's poor economic conditions, which adversely affected consumer confidence, Hong Kong sales achieved a 3.3% improvement to about HK$1,507 million (2001: about HK$1,458 million). The six-month operation of the Lok Fu store compared with just two months operation last year contributed to the improvement in sales. The opening of the Group's flagship "$10 Plaza" in Causeway Bay also contributed a further source of revenue for the Group. PRC sales achieved 11.3% growth to approximately HK$294 million (2001: about HK$264 million). In May 2002, the Group opened a new store in Dongguan, which contributed to the sales growth.

The Group's gross profit margin decreased slightly from 27.8% to 27.3% compared to the same period last year. Staff costs against turnover dropped from last year's 10.6% to this year's 10.3%, while rental costs against turnover recorded a slight increase from 9.4% to 9.7%. As at 31 August 2002, the Group maintained a healthy financial position with no bank borrowings and net cash balances of over HK$326 million (2001: HK$355 million).

The Group is planning to expand its share in the Hong Kong retail market by opening two to three GMS within the next three years. In addition, encouraged by the satisfactory results of its "$10 Plazas", it is the Group's strategy to open more "$10 Plazas" inside and outside JUSCO stores in the near future.

With regard to the PRC market, the Group recently opened its Shenzhen store in September 2002 and will open its Zhuhai store in December 2002. The Group is confident that the new stores will generate positive contributions in the future. In May and September 2002, the Group entered into agreements with real estate developers to set up new stores in the PRC in Zhongshan and Foshan City. The Group expects the new stores to commence operations in 2003 and 2004 respectively.

Mr Ishii concluded, "We believe that there is still a lot of room for our expansion in Southern China, especially since China became a member of WTO. We will further expand our market share and enhance our brand building strategy in the years to come. We will continue to explore various prime locations for our new stores aiming to operate at least 50 GMS in Southern China including Hong Kong within the next five years to bring better returns to our shareholders."

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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