GC Construction Holdings (1489) H1 23/24 earnings summary

Executive summary

• H1 FY2023/24 revenue rose 7.7% YoY to HK$282.839m, while gross profit fell 8.4% to HK$29.288m and attributable profit declined 54.2% to HK$16.614m.

• Backlog increased to HK$758.8m across 60 projects at 30 September 2023, from HK$621.4m across 53 projects at 31 March; management expects stable performance in the coming year.

Financial highlights

• Service costs rose 9.9% to HK$253.551m, driven by higher activity and skilled-worker shortages; gross margin fell to 10.4% from 12.2%.

• Profit before tax was HK$19.789m versus HK$40.339m; basic and diluted EPS was HK1.7 cents versus HK4.8 cents.

• Other income fell to HK$0.093m from HK$18.582m, including the prior-period HK$18.3m Employment Support Scheme subsidy; administrative expenses rose to HK$9.907m from HK$6.629m.

• Operating cash flow was HK$13.0m versus a HK$4.1m outflow; cash and cash equivalents were HK$54.2m at 30 September 2023.

Outlook and guidance

• Management expects financial performance to remain stable in the coming year and is cautiously optimistic about the local construction market, while maintaining focus on core operations.

• Overseas opportunities, particularly in Southeast Asia, are being explored to diversify revenue; market conditions will continue to be monitored.