PORTICO INTERNATIONAL HOLDINGS LTD Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
Portico International Holdings Limited寶國國際控股有限公司*
(Incorporated in Bermuda with limited liability) (Stock Code: 589)
INTERIM RESULTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2015 HIGHLIGHTS OF INTERIM RESULTS Total revenue was RMB 847.8 million, decreased by 12.1% as compared with the corresponding period in 2014
Gross profit margin stood at 81.5% (1H2014: 81.5%)
Profit attributable to shareholders was RMB 16.3 million, declined by 70.4%
Earnings per share was RMB 0.03
No interim dividend was declared
INTERIM RESULTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2015 ("1H2015")The board of directors (the "Board") of Portico International Holdings Limited (the "Company") is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (the "Group") for the period ended 30 June 2015 with comparative figures for the same period ended 2014 ("1H2014") as follows:
*for identification purpose only
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Consolidated statement of comprehensive income for the six months ended 30 June 2015 (unaudited)Six months ended 30 June Note 2015 2014
RMB'000 RMB'000
Revenue 3 847,786 964,960
Cost of sales (156,567) (178,619)
Other revenue 4(a) 5,450 2,871
Other net expense 4(b) (111) (34) Distribution costs (497,383) (533,968) Administrative expenses (55,149) (55,490) Other operating expenses (87,699) (91,854)
Finance income 14,710 16,804
Finance costs (13,366) (15,337)
------------------- -------------------
Profit before taxation 5 57,671 109,333
Income tax 6 (40,014) (52,183)
Items that may be reclassified subsequently to
profit or loss:
Exchange difference on translation of:
-financial statements of overseas subsidiaries (1,027) (795)
Equity shareholders of the Company 16,280 54,965
Non-controlling interests 1,377 2,185
Equity shareholders of the Company 14,836 54,152
Non-controlling interests 1,794 2,203
-Basic 7 0.03 0.10
-Diluted 7 0.03 0.10
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Consolidated balance sheet at 30 June 2015 (unaudited)Note At 30 June At 31 December
2015 2014
RMB'000 RMB'000
Non-current assets
Lease prepayments 23,310 23,563
Property, plant and equipment 479,316 456,270
Intangible assets - 8,422
Deferred tax assets 167,123 159,280
669,749 647,535
------------------- -------------------
Inventories 727,224 721,551
Trade and other receivables, deposits
and prepayments 9 316,566 364,283
Pledged bank deposits 210,628 284,945
Fixed deposits with banks 546,306 511,115
Trading securities 2,023 - Cash and cash equivalents 607,854 519,176
2,410,601 2,401,070
------------------- -------------------
Trade payables, other payables and accruals 11 381,648 219,126
Interest-bearing borrowings 12 475,332 602,106
Current taxation 22,905 50,195
879,885 871,427
------------------- -------------------
Net current assets 1,530,716 1,529,643------------------- -------------------
Total assets less current liabilities 2,200,465 2,177,178
Non-current liabilities
Interest-bearing borrowings 12 8,019 -
Trade payables, other payables
and accruals 11 67,285 62,887
Deferred tax liabilities 12,993 17,443
88,297 80,330
------------------- -------------------
Net assets 2,112,168 2,096,848
Share capital 1,474 1,474
Reserves 2,088,846 2,074,010
equity shareholders of the Company | 2,090,320 | 2,075,484 |
Non-controlling interests | 21,848 | 21,364 |
Total equity | 2,112,168 | 2,096,848 |
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NOTES 1. Basis of preparation
Portico International Holdings Limited (formerly known as Ports Design Limited) ("the Company") is a company incorporated in Bermuda with limited liability. Pursuant to the resolution passed at the Annual General Meeting on 29 May 2015, the name of the Company has been changed from Ports Design Limited to Portico International Holdings Limited, with effect from 4 June 2015. The interim financial report of the Company for the six months ended
30 June 2015 comprises the Company and its subsidiaries (together referred to as the "Group").
This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard ("IAS") 34, Interim financial reporting, issued by the International Accounting Standards Board ("IASB"). It was authorised for issue on 28 August 2015.
The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2014 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2015 annual financial statements. Details of these changes in accounting policies are set out in note 2.
The preparation of an interim financial report in conformity with IAS 34 requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.
The interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2014 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for full set of financial statements prepared in accordance with International Financial Reporting Standards ("IFRS").
The interim financial report is unaudited, but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity, issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
The financial information relating to the financial year ended 31 December 2014 that is included in the interim financial report as comparative information does not constitute the Company's statutory annual consolidated financial statements for that financial year but is derived from those financial statements. Statutory financial statements for the year ended 31
December 2014 are available from the Company's registered office. The auditors have
expressed an unqualified opinion on those financial statements in their report dated 31 March
2015.
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2. Changes in accounting policies
The IASB has issued the following amendments to IFRSs that are first effective for the current accounting period of the Group and the Company.
Annual Improvements to IFRSs 2010-2012 Cycle
Annual Improvements to IFRSs 2011-2013 Cycle
None of these developments have had a material effect on how the Group's results and financial position for the current or prior periods have been prepared or presented. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.
The Group manages its businesses by business lines. In a manner consistent with the way in which information is reported internally to the Group's most senior executive management for the purposes of resource allocation and performance assessment, the Group has identified the following one reportable segment.
Retail: this segment primarily derives revenue from retail sales in the People's Republic of China ("the PRC"). The products are either sourced externally or are manufactured in the Group's manufacturing facilities located in the PRC.
For the purposes of assessing segment performance and allocating resources between segments, the Group's senior executive management monitors the results and assets attributable to each reportable segment on the following bases:
Segment assets represent inventories only.
Revenue and expenses are allocated to the reportable segments with reference to sales generated by those segments and the expenses incurred by those segments.
The measure used for reporting segment profit is gross profit less distribution costs directly attributable to the segment.
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3. Segment reporting (continued) (a) Segment result and assets (continued)Information regarding the Group's reportable segments as provided to the Group's most senior executive management for the purposes of resource allocation and assessment of segment performance for the period is set out below.
Six months ended 30 June Retail Others(*) Total
2015 2014 2015 2014 2015 2014 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000Revenue from
external customers 778,497 877,200 69,289 87,760 847,786 964,960
Reportable segment revenue 778,497 877,200 69,289 87,760 847,786 964,960
Reportable segment profit 260,594 413,004 23,553 30,703 284,147 443,707
Retail Others(*) Total
30 June 31 December 30 June 31 December 30 June 31 December 2015 2014 2015 2014 2015 2014 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000Reportable segment assets 663,725 668,127 63,499 53,424 727,224 721,551
(*) Revenue from segments below the quantitative thresholds are mainly attributable to three operating segments of the Group. Those segments include OEM sales, export sales and wholesales. None of those segments met any of the quantitative thresholds for determining reportable segments.
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3. Segment reporting (continued) (b) Reconciliations of reportable segment revenue, profit and assetsSix months ended 30 June
2015 RMB'000 | 2014 RMB'000 | |
Revenue Reportable segment revenue | 778,497 | 877,200 |
Other revenue | 69,289 | 87,760 |
Consolidated turnover | 847,786 | 964,960 |
Profit Reportable segment profit | 260,594 | 413,004 |
Other profit | 23,553 | 30,703 |
284,147 | 443,707 | |
Other revenue and other net expense | 5,339 | 2,837 |
Distribution costs | (90,311) | (191,334) |
Administrative expenses | (55,149) | (55,490) |
Other operating expenses | (87,699) | (91,854) |
Net finance income | 1,344 | 1,467 |
Consolidated profit before taxation | 57,671 | 109,333 |
At 30 June 2015 RMB'000 | At 31 December 2014 RMB'000 | |
Assets Reportable segment assets | 663,725 | 668,127 |
Other inventories | 63,499 | 53,424 |
Consolidated inventories | 727,224 | 721,551 |
Non-current assets Trade and other receivables, deposits and prepayments | 669,749 316,566 | 647,535 364,283 |
Pledged bank deposits | 210,628 | 284,945 |
Fixed deposits with banks | 546,306 | 511,115 |
Cash and cash equivalents | 607,854 | 519,176 |
Trading securities | 2,023 | - |
Consolidated total assets | 3,080,350 | 3,048,605 |
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4. Other revenue and other net expense (a) Other revenueSix months ended 30 June
2015 RMB'000 | 2014 RMB'000 | |
Liaison service income | 2,273 | 567 |
Royalty income | - | 47 |
Design and decoration income | 1,464 | 1,129 |
Insurance compensation | 462 | 469 |
Government subsidy (see note (i) below) | 950 | - |
Others | 301 | 659 |
5,450 | 2,871 |
(i) The subsidy received from local government authorities is unconditional. The
Group may note received government subsidy in the future.
Six months ended 30 June
2015 2014
RMB'000 RMB'000
Net realised and unrealised
loss on trading securities (132) - Net gain/ (loss) on sales of property,
plant and equipment 21 (34)
(111) (34)
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5. Profit before taxationProfit before taxation is arrived at after crediting:
(a) Net finance incomeSix months ended 30 June
2015 2014
RMB'000 RMB'000
Interest income (14,710) (16,804)
Finance income (14,710) (16,804)
------------------- -------------------
Interest expense on bank loans
repayable within five years 4,930 6,503
Interest expense, net 4,930 6,503
Net foreign exchange loss 6,786 6,112
Others 1,650 2,722
Finance costs 13,366 15,337
------------------- -------------------
Net finance income (1,344) (1,467)
Operating leases charges in respect of properties
- minimum lease payments 111,487 122,248
- contingent rents 122,764 136,082
234,251 258,330
Depreciation 54,687 60,100
Amortisation - lease prepayments 253 464
Cost of inventories 244,266 270,473
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6. Income taxSix months ended 30 June
2015 RMB'000 | 2014 RMB'000 | |
Current tax - PRC income tax | 44,307 | 57,505 |
Deferred taxation | (4,293) | (5,322) |
40,014 | 52,183 |
(i) Pursuant to the rules and regulations of Bermuda, the Company is not subject to any income tax in Bermuda. Also, certain subsidiaries located in British Virgin Islands and Samoa Islands are not subject to any income tax in their local jurisdictions.
(ii) No provision for Hong Kong Profits Tax has been made during the six months ended 30
June 2015 and 2014 as the subsidiaries in Hong Kong did not earn any assessable income for Hong Kong Profits tax purpose.
(iii) All PRC subsidiaries are subject to income tax rate at 25% for the six months ended 30
June 2015 and 2014 under the Enterprise Income Tax law ("EIT law") which was
enacted on 16 March 2007.
Pursuant to the EIT Law, 10% withholding tax is levied on the foreign investor (foreign investors which are registered in Hong Kong and meet certain requirements specified in the relevant tax regulations in the PRC may be entitled to a preferential 5% rate), in respect of dividend distributions arising from profit earned by a foreign investment enterprise in the PRC after 1 January 2008. As at 30 June 2015, deferred tax liabilities of RMB 98,342 thousand (31 December 2014: 96,430 thousand) have not been recognised in respect of the tax that would be payable on the distribution of the retained profits of the Group's PRC subsidiaries as the Company controls the dividend policy of these subsidiaries and it has been determined that it is probable that these profits earned by the Group's subsidiaries in the PRC will not be distributed in the foreseeable future.
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7. Earnings per share (a) Basic earnings per share
The calculation of basic earnings per share for the six months ended 30 June 2015 is based on the profit attributable to equity shareholders of the Company of RMB 16,280 thousand (2014: RMB 54,965 thousand) and the weighted average number of
554,453,492 (2014: 554,453,492) ordinary shares in issue during the period.
The calculation of diluted earnings per share for the six months ended 30 June 2015 is based on the profit attributable to equity shareholders of the Company of RMB 16,280 thousand (2014: RMB 54,965 thousand) and the weighted average number of
554,453,492 (2014: 554,453,492) ordinary shares in issue.
The calculation of diluted earnings per share amount for the six months period ended
30 June 2014 did not include the potential effect of the deemed issue of shares under
the Company's share option scheme for nil consideration into ordinary shares as it had
an anti-dilutive effect on the basic earnings per share amount during the period.
As disclosed in note 14, no share option was outstanding and exercisable as at 30 June
2015. No dilutive effect on the basic earnings per share amount during the six months period ended 30 June 2015.
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