Best Mart 360 Interim Results: Revenue and net profit increased by 19.6% and 261.5% YoY; Proposed an interim dividend of HK8.0 cents per share

• Revenue increased by 19.6% to approximately HK$1,031.9 million.
• Gross profit increased by 30.7% to approximately HK$364.7 million, gross profit margin increased by 3.0 percentage points to 35.3%.
• Profit attributable to owners of the Company increased by 261.5% to approximately HK$82.0 million.
• As at 30 Sep 2022, the Group operated a total of 144 chain retail stores, representing an increase of 15 stores as compared with the Corresponding Period Last Year
• Basic earnings per share was 8.2 cents. The Board recommended the payment of interim dividend of HK8.0 cents per share.

Financial Highlights:

HONG KONG SAR – Media OutReach – 24 November 2022 – Best Mart 360 Holdings Limited (“Best Mart 360” or the “Company”, together with its subsidiaries, the “Group”; stock code: 2360.HK), a leading leisure food retailer in Hong Kong, announced its interim results for the six months ended 30 September 2022 (“the Period under Review”). During the Period under Review, the revenue recorded by the Group amounted to approximately HK$1,031,896,000 representing an increase of approximately 19.6% as compared to approximately HK$862,978,000 for the six months ended 30 September 2021 (the “Corresponding Period Last Year”). Profit attributable to owners of the Company amounted to approximately HK$82,049,000 during the Period under Review (for the six-month period ended 30 September 2021: approximately HK$22,699,000). Excluding the non-recurring income of approximately HK$17,996,000 received from the Hong Kong government under the Employment Support Scheme, the year-on-year increase would be approximately 182.2%.

During the Period under Review, gross profit and gross profit margin of the Group were approximately HK$364,712,000 and 35.3%, representing an increase of 30.7% and 3.0 percentage points as compared to gross profits of approximately HK$279,132,000 and gross profit margin of approximately 32.3% for the Corresponding Period Last Year, respectively. The significant increases were mainly attributable to the Group maintaining an active expansion policy to increase the strategic footholds of physical stores, as well as the appropriate adjustments made by the Group to its sales strategy and optimization of its product structure which have resulted in a more diversified range of products.

During the Period under Review, basic earnings per share of the Group was approximately HK8.2 cents (for the six months ended 30 September 2021: HK2.3 cents). The Board recommended the payment of interim dividend of HK8.0 cents per share.

BUSINESS REVIEW

CHAIN RETAIL STORES

As at 30 September 2022, the Group operated a total of 144 chain retail stores, comprising 141 “Best Mart 360˚” and three “FoodVille” stores (30 September 2021: 128 stores and one store, respectively). In terms of geographical coverage, as at 30 September 2022, the Group operated 136 stores, six stores and two stores in Hong Kong, Macau and Mainland China, respectively (30 September 2021: 124 stores, five stores and nil, respectively). During the Period under Review, the Company proactively expanded the footprint of its physical stores and has gradually rented larger retail spaces for stores over time. Also, the Company has gradually optimised its stores in line with the diversification of its product mix to enhance the brand image.

The Group will continue to concentrate on increasing its presence in shopping arcades in community or residential areas and have taken into account the customer traffic and operational efficiency of each store at the same time to adopt a cautious approach in expansion. For the six months ended 30 September 2022, the ratio of rental expense (on a cash basis) to sales revenue of the Group’s retail stores was approximately 10.4%, representing a decrease of 1.4 percentage points as compared to approximately 11.8% for the Corresponding Period Last Year.

THE PRODUCTS

During the Period under Review, the Group adhered to its global procurement policy by sourcing a broad spectrum of products worldwide to continue optismising and enriching its product portfolio. For the six months ended 30 September 2022, the Group has sold more than 900 brands and over 3,000 SKUs of products in total, offering customers a diversified range of choices.

To enhance brand advantages, control product quality and supply more effectively and maintain profitability, the Group continued to actively develop its private label products during the Period under Review. For the six months ended 30 September 2022, sales of private label products amounted to approximately HK$151,064,000 (for the six months ended 30 September 2021: approximately HK$140,044,000), representing an increase of 7.9% as compared with the Corresponding Period Last Year and accounted for approximately 14.6% of the Group’s overall revenue for the Period under Review.

During the Period under Review, the Group has strengthened its private label products and has developed a cumulative total of 11 private labels and 183 products, including nuts and dried fruits, canned Chinese delicacies, cereals, milk, honey, masks and daily necessities and a wide range of leisure food products.

MEMBERSHIP SCHEME AND MARKETING & PROMOTIONAL ACTIVITIES

As at 30 September 2022, the number of the Group’s registered fans and members was approximately 1,931,400 (30 September 2021: 1,764,600), representing a year-on-year growth of 9.5%. The number of mobile app members has reached approximately 815,100, an increase of 27.9% from approximately 637,100 of the Corresponding Period Last Year.

Meanwhile, the Group has conducted various marketing and promotional activities to enhance the brand’s exposure in the market during the Period under Review.

EMPLOYEES

As at 30 September 2022, the number of full-time and part-time employees of the Group was 1,167 (30 September 2021: 900). The Group is committed to investing resources in optimizing its systems. By consolidating the systems within the Group, the Group has fostered a close communication of information between front-line and back-end staff, established a more meticulous and integrated management on people, goods and venues, and provided support to applicants. The Group has also further enhanced automation to streamline processes and boosted overall efficiency. Staff costs (excluding Directors’ emoluments) of the Group for the six months ended 30 September 2022 accounted for approximately 9.4% of revenue, representing a decrease of 0.7 percentage points as compared to 10.1% in the Corresponding Period Last Year.

OUTLOOK

Looking ahead, as the market anticipates the lifting of all travel restrictions by the government and a continued improvement in local business sentiment, the Group will also ride on the economic recovery to consistently look for suitable opportunities to expand the store network of its major retail brand “Best Mart 360˚” and global gourmet store “FoodVille” in Hong Kong, Macau and Mainland China, with a target of achieving a net increase of 20 retail stores each year to satisfy the demand of different customer segments for quality food products under a “dual-brand” model. The “Best Mart 360˚” brand will continue to focus on serving the residential areas and expanding the coverage of its store network, while the ongoing optimization of existing retail stores will continue, with a view to providing more comfortable shopping experience to customers and boosting store sales. “FoodVille” will target large and medium-to-high-end shopping malls in Hong Kong as well as stores with larger area and locations with higher customer traffic and stronger consumer spending power. The Group will strive to increase the number of exclusive products of “FoodVille” and actively look for medium-to-high-end diversified quality products from around the world, in order to further differentiate the two brands.

To uphold its business mission in offering the “Best Quality” and “Best Price” to its customers, the Group will strive to strengthen the core competitiveness of its brand. Apart from continuing to source a diversified range of food products worldwide, the Group will also step up the development of its private label products, not only to satisfy market demand for daily necessities and enrich the choices for customers, but also to effectively control product quality. The Group will continue to actively identify upstream suppliers to secure a lower procurement cost, in order to maintain its competitive advantages in pricing.

The Board is of the view that business diversification can effectively expand the Group’s income stream and enable the Group to better attract recurring purchases from customers. In addition to accelerating deployment in the Greater Bay Area with the target of expanding its physical sales network across the country, the Group is also actively examining a trial run of an e-commerce business in Mainland China to allow customers to make online purchases via a WeChat mini-app, with delivery service covering an ecosphere of 3km from the store location, striving for the fastest delivery. It is expected that the operation will commence in this financial year.

Follow the Group will continue to develop its business-to-business (B2B) segment by bulk selling its private label products and other imported products to other retailers in Hong Kong, online stores and even merchants or enterprises in other overseas markets, with a view to expanding the Group’s potential customer base and generate more steady streams of revenue to maintain the profitability of the Group.
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About Best Mart 360 Holdings Limited

Best Mart 360 Holdings Limited, mainly operates chain retail stores under the brand “Best Mart 360˚”. It offers wide collection of imported prepackaged leisure foods and other grocery products, principally from overseas. The Group’s business objective is to offer “Best Quality” and “Best Price” products to customers through continuous efforts on global procurement with a mission to provide comfortable shopping environment and pleasurable shopping experience to customers. As at 30 September 2022, the Group operates 144 retail stores that are strategically located at 18 districts in Hong Kong, Macau and Mainland China. In addition, the Group’s new global gourmet store, “FoodVille”, was officially opened in September 2021, which mainly provides globally sourced medium-to-high-end quality food products.