|Business Transformation Successes;|
Three Categories of Business Continue to Capture Growth
HONG KONG, Feb 28, 2020 - (ACN Newswire) - NOVA Group Holdings Limited (the "Group"; stock code: 1360), an industry-leading cultural and entertainment comprehensive services platform, turned around its business, achieving HK$106.6 million net profit for its interim results for the six months ended 31 December 2019 (the "Reporting Period").
- Revenue surged 51.2% to HK$426.6 million
- Adjusted EBITDA increased 13.1% to HK$184.5 million
- Net profit turned around for the period to HK$106.6 million
- Operating profit turned around to HK$179.9 million; operating profit margin was 42%
- Proactively reformed and enhanced core businesses, and continued to extend promising business operations through three comprehensive main categories of business to capture market opportunities
NOVA's management has been dedicated on the business transformation for slightly over a year, the business strategy has begun to bear fruit. During the Reporting Period, the Group delivered a satisfactory result. Revenue surged healthily by 51.2% to HK$426.6 million year-on-year. Net profit for the period turned around to HK$106.6 million, from a net loss of HK$127 million, which was mainly due to the decrease in net loss on change in fair value of contingent consideration payables. The Group's operating profit turned around to HK$179.9 million, while adjusted EBITDA was up 13.1% to HK$184.5 million.
Mr DENG Zhonglin, Chairman of NOVA Group, said, "Through the concerted efforts of our management team and the entire workforce, the Group has realised great progress in the transformation of our business, which has delivered promising results, setting a solid foundation for our leadership in the industry. We will continue to extend business operations through three comprehensive main categories of business. We have also identified new growth areas and development directions setting a course for our sustainable development. In all, we are confident that our business strategy can advance the Group to new heights in the coming few years."
Cultural and Entertainment Business
As a key income source of the Group, the overall business performance of the cultural and entertainment comprehensive platform services was strengthened and segment revenue increased by 33.6% to HK$346.5 million for the Reporting Period. The improvement was primarily due to the new business of trading of goods of HK$90.1 million. The Group co-operated with several reputable liquor brands and agents to sell popular liquors during the Reporting Period.
To date, the Group's comprehensive services platform, which can be divided into three main categories of "Entertainment Operations Management Solutions and Consulting Services", "Comprehensive Entertainment Supply Chain Services" and "Product Promotion and Marketing Planning Services", provided the following services:
1. Brand management and related services - Providing bar brand management and related services under the name of "PHEBE", "MT", "U.CLUB" and "DrOscar";
2. Solution and consulting services - Providing systematic entertainment solution and advisory services, including entertainment management consulting, event planning, construction, online marketing and other ad hoc consultancy services;
3. Contracting services and entertainment equipment solution - Providing and supplying customised and thematic entertainment equipment and software materials integration services to customers, which enable to achieve good stage and visual effect, such as thematic equipment of bar lighting, audio and audio system, stage machinery, etc.;
4. Trading of goods - Trading of wine and liquor, e-cigarettes and daily supplies to entertainment stores and NOD Union members;
5. Artist agency - Providing booking coordination services of international popular disc jockey and artist agency service to bars, club and lounges;
6. Products promotion services - Including wine, liquor, e-cigarettes, power bank and other product promoting services for suppliers.
The Group has commenced comprehensive wine & liquor supplying and solution services to entertainment stores and NOD Union members. These services not only have enjoyed a good start, recording a sustainable relationship with its customers, but also brought synergies to supplement the growth of its comprehensive services platform. With the connection and customer base of NOD Union, the Group has generated a satisfactory revenue and will continue to explore the market.
In order to maximise its value and generate the most profit during the Reporting Period, the Group has managed the operations as one synergistic whole. Financing, as a main component, contributes to the Group's operations. The overall financing services business performance was strengthening and revenue had increased by 768% to HK$34.2 million for the Reporting Period.
Exhibition and Events Business
During the Reporting Period, NOVA has generated an increasing profit in exhibition and exhibition-related services. Thanks to the launching of "unmanned self-serviced stores exhibition", named the third edition of Unattended Retail Exhibition, and the first edition of the Important Product Tracing Expo held during 21 to 23 August 2019 in at Shanghai Hongqiao National Exhibition Centre. Both events had attracted over 280 exhibitors to participate. On top of that, it has also completed over 45 medium-sized event planning projects in the PRC.
From the above, the Group recorded HK$45.9 million in revenue, representing an increase of 143.8% compared with the corresponding period. Moving forward, the Group will continue to seek new business partners and organisers in the PRC, as well as explore opportunities to cooperate with industry associations or government organisations to participate in new exhibitions.
The PRC is facing challenges lately, be it the impact from the China-US trade war and the coronavirus outbreak. The overall economy is likely to continue contracting in 2020. Due to that, the Group will be more prudent in managing exhibition and entertainment business operations and evaluating business development opportunities to diversify the revenue sources and strengthen the competitive advantages in order to minimise the possible exposure to the uncertainties in both the Hong Kong and PRC markets.
Given that more cultural and entertainment store customers are relying on network information of new products and services, it is vital to expand NOVA's foothold and upgrad its network software in the comprehensive services platform, which is included but not limited to an one-stop entertainment software-as-a-service (SaaS) application, namely Great Wisdom Entertainment online. This network software services will enable its suppliers, existing store customers and NOD Union members to access to the products and services information and details from the e-platform, which can also decrease their cost of inventory management and boost their brand awareness. The Group will focus on the e-platform and provide more comprehensive services to its existing members, customers and suppliers moving forwards.
Mr XU Feng, Chief Executive Officer of NOVA Group, concluded, "Our professional and attentive services not only resolves problems of our customers, it also further tightens our binding relationships and their reliance on us. Even under the challenging market environment, we will keep looking for new solutions and bring in fresh ideas to our customers and to the industry, ensuring a stable and healthy business growth for all parties. We will continue to execute pragmatic yet aggressive business strategies as we have previously done in an effort to achieve long-term stable growth and bring promising returns to our shareholders."
NOVA Group Holdings Limited (Stock Code: 1360)
NOVA Group Holdings Limited, formerly Mega Expo Holdings Limited is an investment holding company mainly engaged in the cultural entertainment business and exhibition business. The Company engaged in cultural entertainment brand building and management, consultancy, marketing, system integration and solutions of audio-visual and stage equipment, supply-chain finance, business space design, real-life decoration and other services for offline music entities, as well as provision of exhibition services.
For details, please refer to the company website: www.novahldg.com
Topic: Press release summary
Source: NOVA Group Holdings Limited
Sectors: Daily Finance, Daily News
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