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Friday, 19 September 2014, 15:18 HKT/SGT | |
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Turning Loss into Profit Revenue Increased Significantly by 145% |
HONG KONG, Sept 19, 2014 - (ACN Newswire) - China Vanguard Group Limited ("China Vanguard" or the "Company"; Stock Code: 8156.HK; the Company and its subsidiaries collectively called the "Group"), a dominant player in China welfare and sport lottery industry, is pleased to announce the unaudited consolidated financial results of the Company and its subsidiaries (collectively the "Group") for the year ended 30 June 2014 ("Reporting Period").
-- Revenue increased to HK$96 million, representing an increase of approximately 145% as compared to Year 2013 -- Profit attributable to equity holders for HK$15 million turnaround and a significant improvement as compared to Year 2013 -- 85% of the Group's revenue was derived from the lottery-related services business which increased by 110% to HK$82million -- Property development business contributed to another 15% of the Group's operating revenue and achieved HK$14 million -- Gross Profit increased 160% to HK$90 million. Gross Profit ratio was 94%, increased by 7%
In the Reporting Period, The Group recorded revenue of HK$96 million for Year 2014, an increase of 145% from 2013 of HK$39 million. Among which,85% was derived from the lottery-related services business which increased by 110% to HK$82 million as compared to Year 2013. Property development business contributed to another 15% of the Group's operating revenue and achieved HK$14 million. Profit attributable to equity holders for Year 2014 was HK$15 million, representing a turnaround and a significant improvement as compared to loss of HK$42 million in Year 2013. The Group core operating cost amounted to HK$68 million in Year 2014, a decrease of 3% from Year 2013 of HK$70.5 million. The Group's gross profit increased 160% to HK$90 million in Year 2014. The Group's gross profit ratio was 94%, increased by 7% in Year 2014 as compared with 88% Year 2013.
Lottery-related Operations The lottery operations of the Group were supplying lottery software, equipment and services to the China lottery authorities. We also conducted the downstream operation of a lottery distribution network in China. Our operations covered, such as Zhejiang, Heilongjiang, Chongqing, Tianjin, Jilin, Anhui, Shandong and others for a total of eighteen provinces and regions as of the date of this report.
The Group successfully initiated the interactive self-service business whilst maintaining its solid sale in traditional lottery business during the year. Also, we have established physical lottery distribution network in the form of self-operated stores and franchise stores through diversified strategic channels and locations. Our scope of services have further extended to include transforming and upgrading the existing point-of-sales (POS) and the provision of marketing and training services, which broadened our revenue stream.
Interactive self-service lottery solution has been developed for several years. Our touchscreen based interactive solution is aimed to enhance the gaming experience for lottery players and improve the operation efficiency for the POS operators at the same time.
Last year, after Ministry of Finance, China issued a notice officially categorized self- service as one of the authorized distribution methods, the market recognized the legitimacy of the self-service solutions and our development direction has been proven. Throughout this reporting period, a number of lottery centers have well accepted our solution and authorized us to roll out interactive self-services lottery solutions in their respective jurisdiction.
We have been authorized by the provincial Sports Lottery Administration Centres in 12 provinces and regions to roll out the interactive self-service solutions as of the date of this report. We have progressively launched self-service lottery stores both self-operated flagship stores and franchised stores in our authorized areas, including Anhui, Chongqing, Shandong and others.
Our strong research and development capability has enabled us to extend our business coverage and captured the opportunities arose in the segment beyond traditional lottery business. To further enhance our research and development capability, we have formed cooperation with a subsidiary of Astro Corporation, an international renowned gaming technology company, for products and games development.
In order to cater to the needs of various potentially profitable channels, we had developed several forms of self-service sales system and cooperated with several enterprises, including the cooperative development of mobile applications for self-service sales with ZTE Corporation; the cooperative development of the marketing promotion and sales platform for the mobile phone lottery market with CNLive and Rejoy Culture. Leveraging such partnership, we could expand our tremendous clientele and advantages in professional techniques in the mobile internet industry to further enhance our distribution capability.
As of the date of this report, we had also respectively established certain strategic cooperative relationships with leading participating enterprises in each area, including cooperation with a leading Smart TV provider, TCL Group, in provision of our interactive self-service lottery solutions in paperless form through its Smart TV platform and assisting them in marketing and promotion of lottery sales on Smart TVs. While for the payment clearance system for lottery purchases, we teamed up with Yunbo Digital Synergy Group Limited (YBDS) on equipping all our lottery distribution points with YBDS' non-cash online and offline payment system, such as China Telecom's Bestpay platform, which can be used by mobile payment, payment by cards issued by China Unionpay and other financial institutions.
Our technical capability continued to be recognized by the World Lottery Association, an international lottery industry association, in certifying to World Lottery Association Security Control Standards. We once again successfully renewed and maintained the stringent and comprehensive information system security certification audit from, the World Lottery Association ("WLA"), regarding WLA Security Control System certification ("WLA SCS"). We are the only one lottery solution provider in Asia accredited both WLA SCS and ISO27001:2005.
Land and Property Development Operations The Group via its wholly-owned subsidiary, Jovial Sky Limited, engaged in class 1 land development work, the promotion of the sales of land and property management and consultancy services.
During the period, our land and property development team has realized and monetized opportunities utilizing their expertise. As a result, property operation has recorded a revenue of HK$14 million in regards to the provision of property management and consultancy service.
Future Outlook
Mr. CHAN Ting, the Chief Executive Officer and Executive Director of China Vanguard Group Limited said, "The past financial year has been a period of hardship and extreme challenge for the Group and me. We carefully leverage on the resources and experience we had accumulated in the past years and steer toward a direction where others have not explored before. I am very grateful that the market acceptance has been exceptionally positive. I am determined to further broaden and deepen lottery distribution; further enhance POS management; and create more value from various distribution channels for the Group, for our customers and for our business partners as a whole."
About China Vanguard Group Limited China Vanguard Group Limited was founded in 1999, and was successfully listed on the GEM board of The Stock Exchange of Hong Kong Limited in November 2002. As a leading lottery solutions provider in China welfare and sport lottery industry, China Vanguard established a solid foundation in the traditional lottery industry. In order to further expand market share, the Company introduced revolutionary interactive self-service lottery solutions and developed one-stop shop business model from providing lottery programs to lottery operations. At present, the Company has been authorized to operate lottery business and lottery sales for the Lottery Centre in 18 provinces and regions across China, and to provide lottery equipment, software, related services and a comprehensive lottery distribution network for both China Welfare and Sports Lottery authorities. The Company will continue focusing on the high margin interactive self-service lottery business and comprehensive license portfolio with diversified virtual distribution channels to expand the potential of lottery business; and leveraging international cooperation with software and hardware developers to enhance the R&D capability. The Company strives to become a dominant innovative and full-range lottery solutions provider in China.
Topic: Press release summary
Sectors: Daily Finance, Daily News
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