Easy Smart Group (2442) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 4.9% YoY to HK$352.9m, while net profit fell 18.3% to HK$35.8m as service costs, administrative expenses and impairment losses increased.

• Public-sector projects offset a sharp decline in private-sector revenue; outstanding contracts had an original aggregate contract sum of HK$670.7m at 30 June 2024, versus HK$637.5m a year earlier.

Financial highlights

• Revenue was HK$352.9m versus HK$336.5m; gross profit fell 20.0% to HK$63.6m and gross margin declined to 18.0% from 23.6%.

• PBT decreased 21.2% to HK$43.0m; net profit was HK$35.8m versus HK$43.8m, and basic and diluted EPS were HK8.78 cents.

• Administrative expenses rose 42.5% to HK$20.8m, mainly on higher staff and professional costs; net impairment losses increased to HK$2.1m from HK$0.1m.

• FY2024 had no listing expenses, versus HK$11.8m in FY2023; higher service and administrative costs nevertheless drove lower PBT.

• Net profit margin was 10.2% versus 13.0%; excluding other income and prior-year listing expenses, adjusted net profit margin was 9.5% versus 16.1%.

Outlook and guidance

• Outstanding contracts had an original aggregate contract sum of HK$670.7m at 30 June 2024, up from HK$637.5m a year earlier.

• Government-initiated projects, including Northern Metropolis development, are expected to support Hong Kong construction activity; medium- to long-term outlook remains cautiously optimistic.

• Priorities include specialized passive fire protection services, exploring prefabrication applications, strengthening competitiveness and closely monitoring project costs.