International Housewares Retail Company (1373) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 31 October 2024 was HK$1,270.6 million, down 3.9% year-over-year, reflecting a challenging retail environment in Hong Kong and Singapore, partially offset by growth in Macau.

• Profit attributable to owners was HK$33.0 million, a 35.1% decrease year-over-year, mainly due to lower sales and persistent cost pressures.

• Gross margin improved slightly to 47.0% from 46.8% in the prior year period.

• Interim dividend declared at 4.0 HK cents per share, down from 5.6 HK cents last year, totaling HK$28.8 million.

Financial highlights

• Operating profit for 1H FY2025 was HK$46.9 million, down from HK$67.1 million year-over-year.

• Basic earnings per share were 4.58 HK cents, down from 7.06 HK cents.

• Cash and cash equivalents stood at HK$308.1 million as of 31 October 2024.

• Capex for the period was HK$19.8 million, including HK$25 million for a store property and HK$11 million for logistics upgrades.

• Inventory turnover days increased to 113 from 99 year-over-year.

Outlook and guidance

• Management remains cautiously optimistic for medium- to long-term prospects, focusing on Hong Kong, Singapore, and Macau.

• Plans to upgrade loyalty program, including upgrading 1 million J-Fun members to gold status by 2025, and expand product assortment.

• Continued emphasis on cost control, operational efficiency, and adapting to evolving consumer trends.

• Anticipates benefits from government measures to stimulate Hong Kong's retail market and increased housing supply.

• Planned net increase of 1 store in 2H FY2025 and 5 stores in FY2026.