Financial Information

Consolidated revenue of the Group for the six months ended 31 December 2023 increased by HK$6.6 million or 0.6% to HK$1,169.4 million from HK$1,162.8 million for the corresponding period last year.

Revenue from our Components Distribution (“CD”) segment decreased by HK$44.4 million or 19.3%, from HK$229.9 million for the six months ended 31 December 2022 to HK$185.5 million for the six months ended 31 December 2023. The decrease was due primarily to the persistently sluggish post-pandemic recovery, which fell short of expectations, following the abandonment of the stringent zero-COVID stance in the PRC in January 2023.

Revenue from our Information Technology Infrastructure (“IT Infrastructure”) segment increased by HK$88.6 million or 11.5%, from HK$771.3 million for the six months ended 31 December 2022 to HK$859.9 million for the six months ended 31 December 2023. The increase was mainly due to the initiation of several projects tendered and awarded during the period under review.

Revenue from our Consumer Electronics Products (“CEP”) segment decreased by HK$37.6 million or 23.3%, from HK$161.5 million for the six months ended 31 December 2022 to HK$123.9 million for the six months ended 31 December 2023. The decrease can be attributed primarily to the subdued sentiment prevailing in the local CEP market during the period under review.

Gross profit increased by HK$9.6 million or 11.6%, from HK$83.3 million for the six months ended 31 December 2022 to HK$92.9 million for the six months ended 31 December 2023. The increase in gross profit was mainly due to decrease in write-down of inventories to net realisable value of HK$7.0 million from HK$9.6 million for the six months ended 31 December 2022 to HK$2.6 million for the period under review.

Net other income and gains decreased by approximately HK$8.7 million or 83.6%, from HK$10.4 million for the six months ended 31 December 2022 to HK$1.7 million for the six months ended 31 December 2023. The decrease was mainly due to (1) a HK$4.3 million gain on disposals of property, plant and equipment and investment property in the previous period which did not recur in the current period; (2) a reversal of impairment of trade receivables of HK$2.8 million in the previous period while an impairment loss of trade receivables of HK$0.5 million was being recorded in the current period; and (3) a decrease in Government subsidies on COVID-19 pandemic of HK$1.5 million in the current period.

Selling and distribution costs increased by HK$3.2 million or 9.0%, from HK$34.9 million for the six months ended 31 December 2022 to HK$38.1 million for the six months ended 31 December 2023. The increase was mostly due to HK$2.2 million increase in salesmen remuneration cost as a result of additional head counts and salary increment.

Administrative expenses decreased by approximately HK$1.0 million or 2.5%, from HK$39.0 million for the six months ended 31 December 2022 to HK$38.0 million for the six months ended 31 December 2023. The decrease was mainly due to decrease in depreciation of property, plant and equipment of HK$1.2 million mainly due to the disposal of properties in the PRC and Singapore during the last corresponding period.

Other net expenses increased by approximately HK$1.3 million or 149.4%, from HK$0.9 million for the six months ended 31 December 2022 to HK$2.2 million for the six months ended 31 December 2023.

Finance costs increased by approximately HK$1.6 million or 44.1%, from HK$3.9 million for the six months ended 31 December 2022 to HK$5.5 million for the six months ended 31 December 2023. The increase was mainly due to (1) increase in bank borrowings in order to finance the purchase of goods to meet the increased demand, particularly in the IT segment, for the period under review; and (2) increase in interest rates during the current period.

Net profit attributable to owners of the Company decreased by HK$0.5 million or 4.7%, from HK$11.3 million for the six months ended 31 December 2022 to HK$10.8 million for the six months ended 31 December 2023. The decrease was mainly attributable to (1) HK$8.7 million decrease in other income and gains, net; (2) HK$3.2 million increase in selling and distribution costs; offset by (a) HK$9.6 million increase in gross profit; (b) HK$2.6 million decrease in income tax expenses.

Non-controlling interests represented the non-controlling shareholders’ share of profit/(loss) in our non-wholly owned subsidiaries.

As at 31 December 2023, non-current assets amounted to HK$72.0 million, representing approximately 5.9% of the total assets. Non-current assets decreased by HK$12.3 million or 14.6% to HK$72.0 million as at 31 December 2023 from HK$84.4 million as at 30 June 2023. The decrease was mainly due to the disposal of properties in the PRC and Singapore.

As at 31 December 2023, current assets amounted to approximately HK$1,139.5 million, an increase of HK$131.6 million compared to the immediately preceding financial year end as at 30 June 2023. The increase was mainly due to (1) increase in trade and bill receivables by HK$111.0 million as a result of higher billings towards end of the period under review; and (2) increase in cash and cash equivalents by HK$23.8 million.

As at 31 December 2023, current liabilities amounted to approximately HK$763.7 million, an increase of HK$139.3 million compared to the immediately preceding financial year end as at 30 June 2023. The increase was mainly due to (1) increase in trade and bills payables by HK$117.7 million; (2) increase in interest-bearing bank and other borrowing by HK$40.2 million; and offset by decrease in other payables and accruals by HK$15.0 million.

Non-current liabilities amounted to HK$41.9 million, representing 5.2% of our total liabilities as at 31 December 2023. The amount pertains mainly to other payables of HK$30.1 million arising from warranty service income received in advance which was classified as contract liabilities.

As at 31 December 2023, cash and cash equivalents amounted to approximately HK$113.9 million. Total interest-bearing bank and other borrowings as at 31 December 2023 were HK$186.7 million. The gearing ratio, which is defined as total interest-bearing bank and other borrowings to shareholders’ funds, is 0.46 times (30 June 2023: 0.34 times).