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| Thursday, 30 August 2012, 10:35 HKT/SGT | |
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Source: XNG Group | |
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Profit Increased 52% year-over-year to RMB56.2 million
Proposes interim dividend of HK$0.014 per share |
HONG KONG, Aug 30, 2012 - (ACN Newswire) - Xiao Nan Guo Restaurants Holdings Limited ("Xiao Nan Guo" or "the Company", SEHK stock code: 3666), is pleased to announce its audited consolidated financial results for the Company and its subsidiaries for the six months ended 30 June, 2012 (the "Period").
Financial and Business Highlights:
-- Revenue increased 30.7% year-over-year ("y-o-y") for first half of 2012 to RMB 647.8 million
-- The Group's gross profit increased 34% to RMB438.7 million
-- Net profit in the first half of 2012 rose 51.7% y-o-y to RMB56.2 million
-- Successfully launched a new brand "The Dining Room" in the first half of 2012 and achieved 6.6 times table turnover rate
-- Proposed interim dividend of HK$0.014 per share
The catering and restaurant industry continued to face cost pressures in food ingredient, labor and rental expenses, which had a negative effect on operating costs during the first half of 2012. Nonetheless, through implementing various measures and adjusting development strategy, the Group recorded revenue of RMB647.8 million, representing a 30.7% increase year-over-year, and achieved gross profit of RMB 438.7 million, representing a year-over-year increase of 34%. Net profit for the Period increased by 51.7% to approximately RMB56.2 million compared to the same period in 2011 and earnings per share of RMB5.1 cents, representing an increase of 34.2% as compared to the same period last year.
Successful Launching of Multi-brand Strategy
During the Period, the Company continued to expand its restaurant base into new and existing markets, driven by its distinctive "hub-and-spoke" strategy. A total of four new restaurants were opened in the first half of 2012, including successfully launched of a new brand "The Dining Room" which was very well received; re-establishment of a modern and fully equipped central kitchen in Hong Kong. As a result of such strategy, the company owns and operates six central kitchens and five central warehouses, servicing a restaurant network of 58 Shanghai Xiao Nan Guo restaurants, three Maison De L'Hui restaurants, and one The Dining Room restaurant.
Implementation of a multi-brand strategy has enabled us to sustain both growth and profitability during the first half of 2012. While, March, April and June to August are typically low seasons in the full-service catering and restaurants industry, three brands targeting different consumer segment were able to achieve profitable during the Period.
"Shanghai Xiao Nan Guo" brand caters to medium and high-end consumers, "Maison De L'Hui" is a high-end brand focusing on business clienteles, and "The Dining Room" targets mid-end mass markets by offering a simplified menu and casual dining experience. All three brands contributed positively during the Period.
-- Revenue of Shanghai Xiao Nan Guo in the first half of this year was RMB614.0 million, representing an increase of 31.8% as compared to the same period last year. The total number of 21 new stores was opened in 2011 contributed revenue of RMB169.3 million, representing 26.1% of total revenue, and most of net profit growth. Shanghai Xiao Nan Guo, our existing brand, continued its growth momentum, and became a major contributor of the Group's revenue and cornerstone of development.
-- Revenue of Maison De L'Hui in the first half of this year was RMB 32.4 millio,n, with a significant increase of comparable restaurants sales by 46.1% and realization of profit. Having achieved such a success within a short period of two years for a newly established high-end catering and restaurant brand, Maison De L'Hui signified the effectiveness of the Group's strategy and implementation of its multi-brand strategy.
-- "The Dining Room", a new brand launched in the reporting Period and generated a revenue of HKD2.35 million or RMB1.91 million, customer traffic reached 21,400, a per capita spending of HKD110 and a daily table turnover rate of 6.6 times. And achieved profit within one month after commencement of business.
The following table sets out the key elements of each brand, their complementary positioning, and sharing of the Group's existing resources during the Period:
Shanghai Xiao Maison De L'Hui The Dining Room
Nan Guo
Number of restaurants 58 3 1
Number of cities 10 1 1
Positioning Medium to High-end Medium-end
High-end (casual dining)
Estimated average
check per guest of RMB233 RMB687 HKD110(i)
comparable restaurants
Shared service from shared shared shared
central kitchens
Shared service from shared shared shared
central warehouses
Shared service from shared shared shared
management team at
headquarters
(i) Estimated average check per guest and estimated seat turnover rate of "The Dining Room" are calculated based on actual data of June 2012.
Mr. KANG Jie, CEO of Xiao Nan Guo, said, "Looking at the table turnover rate per day and per capita spending, the Dining Room was able to achieve profit within the first operating month. We intend to make appropriate adjustments and accelerate the opening of more the Dining Room outlets, targeting mid-end and a new mass market segment. Given its lower investment on fixed assets, smaller floor area, flexible and simplified menu which enable faster replication and profit growth, especially during economic downturn."
Effective Control of Operating Cost
Leverage on the Company's economy of scale, our operational team managed to effectively control operating and raw material cost by consolidating a group of strategic suppliers and broadened our supply channels where necessary; and re-assessed our kitchen management to minimize wastage of raw materials. As a percentage of sales for the first half of 2012, the cost food ingredients decreased by 1.6% as compared to the same Period last year. The management will leverage on the economic cycle to seek for more favorable leasing terms for the new sites, in order to lower the rental costs, and take necessary measures to control the management fees and other costs.
Listing on the Hong Kong Exchange; Capital to Fund Growth
Xiao Nan Guo commenced trading of its Shares on the Main Board of the Hong Kong Stock Exchange on July 4, 2012, successfully raised approximately HK$512 million and attracted several major cornerstone investors. The company's public offering was oversubscribed, and it is among the few publicly listed mainland Chinese catering and restaurant brands.
Ms. WANG Huimin, Chairlady of Xiao Nan Guo, said, "We would like to thank our customers for their support over last 25 years that enabled us to successfully list on the Main Board of the Hong Kong Stock Exchange. With the raised capital, the company will continue with its strategy of expansion and investment in operational and information infrastructure to ensure competitiveness of our operations. We will continue to build our brands and corporate profile among customers and investors, which will foster long-term growth and development of the company."
Looking ahead, although the signs of economic improvement are yet to come, the catering and restaurant industry in which the Company operates still has great development opportunity. The company will continue to strengthen and utilize its existing brand equity, standardized management systems, and continue to strengthen its management and operations team, and wisely utilize capital raised from recent public offering. With the guidance from its Board and advisory committee, the Company will prudently adjust its strategy where necessary to proactively respond to marco-economic and market situation, including adjusting or even speed up the pace of opening new stores of different brands, while continue to enhance same store growth in order to maintain steady growth of results and strengthen our leadership position in the catering and restaurant business.
Topic: Earnings
Source: XNG Group
Sectors: Daily Finance, Daily News
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