Financial Information

Financials

Full Year Financial Statements And Dividend Announcement for the Year Ended 30 June 2021

Financials Archive

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GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021

BALANCE SHEET

REVIEW OF PERFORMANCE

PROFIT AND LOSS

Consolidated revenue of the Group increased by approximately HK$109.2 million or 6.2% from HK$1,766.4 million for the year ended 30 June 2020 to HK$1,875.6 million for the year ended 30 June 2021.

Revenue from our Components Distribution ("CD") segment increased by HK$22.5 million or 3.6%, from HK$632.1 million for the year ended 30 June 2020 to HK$654.6 million for the year under review. While there was a decrease in revenue in the first half of the year under review as explained in the FY21 interim results announcement, there was an increase in demand for certain electronic components due to the easing of the adverse effects of COVID-19 pandemic in the early part of 2021.

Revenue from our Information Technology Infrastructure ("IT Infrastructure") segment increased by HK$143.8 million or 15.6%, from HK$922.0 million for the year ended 30 June 2020 to HK$1,065.8 million for the current year. The increase was mostly due to strong demand for network security products, cloud solution services and data visualization tools during the year under review.

Revenue from our Consumer Electronics Products ("CEP") segment decreased by HK$57.1 million or 26.9%, from HK$212.3 million for the year ended 30 June 2020 to HK$155.2 million for the current year. Revenue picked up in the second half of the year under review to ameliorate the first half's 44.7% decrease in revenue as explained in the FY21 interim results announcement. A major reason for the decrease for the full year was due to the continuing COVID-19 pandemic effect during the year under review.

Gross profit increased by HK$27.8 million or 19.1%, from HK$145.8 million for the year ended 30 June 2020 to HK$173.6 million for the year ended 30 June 2021. The increase in gross profit was mainly due to (1) sale of previously written down inventories after the COVID-19 pandemic lock down periods; and (2) provision of more higher margin value added services in the second half of the year under review.

Other income and gains, net increased by HK$7.0 million or 76.4%, from HK$9.1 million for the year ended 30 June 2020 to HK$16.1 million for the year ended 30 June 2021. The increase was mostly due to (1) increase in HK$6.9 million wage subsidy received from the Government of the Hong Kong Special Administrative Region as part of the "Employment Support Scheme" under the "Anti-epidemic Fund"; and (2) fair value gains in investment properties of HK$1.2 million, offset by a decrease in rental income of HK$0.6 million. Decrease in rental income was due to (1) the deployment of a previously letting premises in HK for the Group's own use in early 2020; and (2) the disposal of 3 leased out office units in Shanghai in late 2019.

Selling and distribution costs increased by HK$10.3 million or 15.5%, from HK$66.3 million for the year ended 30 June 2020 to HK$76.6 million for the year ended 30 June 2021. The increase was mainly due to increase in salary, bonus and commission of HK$11.4 million.

Administrative expenses increased by HK$4.6 million or 7.5%, from HK$62.6 million for the year ended 30 June 2020 to HK$67.2 million for the year ended 30 June 2021. The increase was mainly due to increase in salary and bonus of HK$5.9 million; mitigated by (1) decrease in depreciation of property, plant and equipment and right-of-use assets of HK$0.7 million; and (2) decrease in travelling expenses of HK$1.1 million.

Other expenses, net decreased by HK$8.4 million or 52.5% from HK$16.1 million for the year ended 30 June 2020 to HK$7.6 million for the year ended 30 June 2021. The decrease was mainly due to (1) fair value losses on investment properties of HK$6.6 million in last year turned to fair value gains which was recorded under other income during the year under review; (2) loss on disposal of an associate company of HK$4.4 million in last year was not a recurring item; and mitigated by (3) increase in impairment of trade receivables of HK$2.6 million.

Finance costs decreased by HK$1.7 million or 55.1%, from HK$3.1 million for the year ended 30 June 2020 to HK$1.4 million for the year ended 30 June 2021. The decrease was mainly due to bank borrowings interest rate decreased by almost 55 basis points from the last year to the current year.

Net profit attributable to owners of the Company increased by HK$27.6 million or 575.7%, from HK$4.8 million for the year ended 30 June 2020 to HK$32.4 million for the year ended 30 June 2021. The increase was mostly attributable to the increase in gross profit of HK$27.8 million as explained above.

Non-controlling interests represented the non-controlling shareholders' share of loss in our non-wholly owned subsidiaries.

STATEMENT OF FINANCIAL POSITION

Non-current assets comprised goodwill of HK$2.1 million; investment properties, office equipment, leasehold land and buildings and motor vehicles amounting to HK$71.1 million; investment in an associate of HK$3.7 million; prepayments and other assets of HK$20.3 million, deferred tax assets of HK$7.5 million and right-of-use assets of HK$2.5 million. At 30 June 2021, non-current assets amounted to HK$107.2 million, representing approximately 9.9% of the total assets. Non-current assets decreased by HK$61.1 million or 36.3% from HK$168.3 million for the year ended 30 June 2020 to HK$107.2 million for the year ended 30 June 2021. The decrease was mostly due to the classification of an owner-occupied property and an investment property to assets classified as held for sale of HK$72.3 million; mitigated by (1) increase in prepayments and other assets of HK$11.5 million; and (2) increase in right-of-use assets of HK$1.2 million.

As at 30 June 2021, current assets amounted to HK$973.0 million, an increase of HK$246.2 million compared to the immediate preceding financial year end at 30 June 2020. The increase was mostly due to (1) the classification of an owner-occupied property and an investment property to assets classified as held for sale of HK$72.3 million; (2) increase in trade and bills receivables of HK$113.3 million; and (3) increase in inventories of HK$64.0 million, offset by the decrease in cash and cash equivalent of HK$13.0 million.

As at 30 June 2021, current liabilities amounted to approximately HK$606.3 million, an increase of HK$147.3 million compared to the immediately preceding financial year end as at 30 June 2020. The increase was mainly due to (1) increase in trade and bill payables by HK$83.7 million; (2) increase in interest-bearing bank and other borrowings by HK$48.6 million; and (3) increase in liability directly associated with the assets classified as held for sale of HK$1.4 million.

Non-current liabilities amounted to HK$18.1 million, representing 2.9% of the total liabilities as at 30 June 2021. The amount comprised of deferred tax liabilities, long term contract liabilities and long-term lease liabilities. Deferred tax liabilities were recognised as a result of temporary differences between the carrying amounts and tax bases of property, plant and equipment due to depreciation.

As at 30 June 2021, cash and cash equivalents amounted to HK$73.7 million. Total interest bearing loans and borrowings as at 30 June 2021 were HK$134.0 million and the gearing ratio which is defined as total borrowings to total equity, is 0.29 times (2020: 0.20 times).

COMMENTARY

Recent business conditions are promising as demand for electronic components and IT solutions have shown decent growth as the market has evolved to adapting to the pandemic due to the coronavirus. The increase in demand is also driving higher prices in goods that have available inventory or shorter delivery lead time. The worldwide shortages in integrated circuit and chipsets are expected to continue in the next 12 months and is likely to continue to affect supplies in our CD and IT businesses. The growth in Cloud solutions, Network and Cyber Security solutions, and Data management solutions continued under our Group.

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