Press Releases

26 November2019

Café de Coral Group Announces Interim Results 2019/20

Café de Coral Holdings Limited announced its FY2019/20 Interim Results. For the six months ended 30 September 2019, the Group’s revenue increased by 1.6 % to HK$4,263.8 million. Profit attributable to shareholders declined 34.5% to HK$149.7 million. The Board has declared the payment of an interim dividend of HK19 cents per share to shareholders.

The Group’s Hong Kong business has been challenging since late May. Weak market sentiment impacted our quick service restaurant business and casual dining brands, particularly the dinner segment and weekend sales, as well as outlets located in shopping and commercial areas. We launched more value meals and promotions to maintain same store sales and defend market share, in spite of rising operating costs like labour cost and rental expenses. This has resulted in a decline in profit in the near term.

For the six months ended 30 September 2019, revenue of the Group’s quick service restaurant and institutional catering business increased by 2.2% to HK$3,133.4 million. Café de Coral fast food experienced flat same store sales growth. According to figures published by the Census and Statistics Department, the value of total restaurant receipts in July to September decreased HK$3500 million compared to the same quarter in 2018. Although the fast food restaurant sector still recorded incremental growth, industry competition is expected to intensify. Given customers’ increasing sensitivity to price, the Group will be very cautious on price adjustment.

The Group expects market sentiment may take some time to improve. Whilst taking a prudent approach in managing cash flow, controlling costs and improving productivity, we will continue to focus on customer service and dining experience, as well as product quality, which will drive same store sales growth. Hong Kong is the Group’s key market, and we will continue to invest in the city.

As to network expansion, Café de Coral fast food opened 7 new shops in the review period. New shop openings for the second half of the year will focus on areas with high potential and better returns. The business will launch delivery service in the third quarter through foodpanda and mobile apps to explore new sales channels.

Our Southern China fast food business performed well in the first half of the fiscal year. Revenue increased 9.6% to RMB516.0 million, and the business experienced a 6% rise in same store sales growth, driven by enhanced product quality, successful marketing and the continual growth of O2O take-away services. We have also been investing in store renovation to further enhance the brand image. 6 stores were renovated in the first 6 months, with a target of 14 old stores to be re-imaged within the year.

During the period under review the Group formed strategic alliances with eight real estate developers to collaborate on network expansion in Guangdong Province. 5 new shops were opened in Guangzhou, Shenzhen and Zhuhai in the first half of the fiscal year, with a target of opening a total of 21 new outlets within the year. Outlets opened in recent years have maintained healthy same store sales growth, making significant contributions to the development of a quality network and chain store sales. We will allocate additional resources to accelerate the development of the Group’s business in Guangdong Province.

As of the end of September, Café de Coral Group operated 368 outlets and 107 outlets in Hong Kong and Mainland China, respectively.

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