Turnover increases 1.7% to HK$1,656 million
Board Recommends Interim Dividend of HK4.5 cents
Interim Highlights
Turnover increased by 1.7% to HK$1,656 million
Profit Attributable to Owners of the Company decreased by 7.1% to HK$86.9 million
Gross profit margin dropped by 0.8 percentage point to 28.7%
Board of Directors recommended an interim dividend of HK4.5 cents, payout ratio being 62.9%
Strong financial position reflected by the Group’s net cash position with a cash-on-hand balance of HK$7 million
Secured key projects in the pipeline for 2H 2014 and 2015
| Financial Summary | For the 6 months ended 30 April (HK$'000) | ||
| 2014 | 2013 | Change | |
| Turnover | 1,656,367 | 1,629,489 | +1.7% |
| Gross profit | 475,156 | 480,281 | -1.1% |
| Gross profit margin (%) | 28.7% | 29.5% | -0.8 pt |
| Profit from operations | 97,695 | 121,116 | -19.3% |
| Profit attributable to Owners of the Company | 86,903 | 93,539 | -7.1% |
| Basic earnings per share | HK7.15 cents | HK7.70 cents | -7.1% |
| Interim dividend per share (recommended) | HK4.5 cents | HK4.5 cents | - |
(Hong Kong, 27 June 2014) Pico Far East Holdings Limited (“Pico”, “the Company” or “the Group”, HKEx: 0752), a leading global Total Brand Activation company, today announced its 2014 interim results for the 6 months ended 30 April 2014 (the “Period”).
During the Period, Pico recorded a turnover of HK $1,656 million (1H2013: HK$ 1,629 million), increased by 1.7% compared with the previous corresponding period. Profit attributable to owners of the Company decreased by 7.1% to HK$ 86.9 million due to a drop in our gross margin of about 0.8 percentage point from 29.5% to 28.7%. Basic earnings per share is HK7.15 cents compared to HK7.70 cents in the previous corresponding period. The Group maintained a healthy financial position, as reflected by the Group’s net cash position, with a cash-on-hand balance of HK$7 million.
The Board of Directors recommended an interim dividend of HK4.5 cents per ordinary share, same as the previous period.
Mr. Lawrence Chia, Chairman of Pico, said, “Despite the fact that 2014 continues to be a year of challenges due to slowing growth in China and several other Asian regions such as Japan, Korea, and Taiwan. We have been able to secure and complete high-profile projects like the 2014 Sochi Winter Olympics, Bahrain National Day, London Singapore Day, Lotte World Night Parade in Seoul and the Emirates Dubai Jazz Festival.”
Business Review
| Turnover by segment | For the 6 months ended 30 April | ||||
| 2014 | 2013 | Change in turnover | |||
| HK$’ Million | % to Group’s Turnover | HK$’ Million | % to Group’s Turnover | ||
| Exhibition and Event Marketing Services | 1,242.0 | 75.0% | 1,170.2 | 71.8% | +6.1% |
| Brand Signage & Visual Communication | 230.2 | 13.9% | 300.7 | 18.5% | -23.4% |
| Museum, Themed Environment, Interior & Retail | 131.4 | 7.9% | 107.4 | 6.6% | +22.3% |
| Conference and Show Management | 52.8 | 3.2% | 51.3 | 3.1% | +2.9% |
The Exhibition and Event Marketing Services segment performance remained stable.
Due to a number of recurring shows and several new clients in this segment, financial year 2014 got off to a good start. Highlights include the APEC 2014 Symposium and the APEC Informal Senior Officials’ Meeting in Beijing, Auto China in Beijing, Auto Guangzhou and Bangkok International Motor Show and Motor Expo. Meanwhile, Pico also provided exhibition and event marketing services to a wide variety of major car brands including Audi, Chevrolet, Ferrari, Infiniti, Jaguar, Lexus, Maserati, Mercedes-Benz, Mitsubishi, Nissan and Peugeot in various parts of the world.
During the Period, Pico successfully fulfilled an overlay contract for the 2014 Sochi Winter Olympics. Other major events included Bahrain National Day, the Cathay Pacific/HSBC Rugby Sevens in Hong Kong, the Emirates Dubai Jazz Festival, HSBC Golf Champions events in Abu Dhabi and Singapore, Singapore Day in London and Lotte World Night Parade in Seoul.
The Brand Signage and Visual Communication business segment reported a decline in the first half of the year.
During the period, we continued to provide visual identity solutions for many car brands in China, namely Cadillac, Changan, Chevy, Dongfeng Peugeot, Ford, Infiniti, Jaguar Land Rover, Lexus, Mercedes-Benz, Nissan, Peugeot, Renault and Shanghai General Motors. Due to the PRC government’s tighter monetary policy, some of the expansion plans of a number of dealers have been postponed to the second half of this year.
Looking forward, Pico has confirmed a new order from Infiniti Global to design and build the merchandise areas of all Infiniti showrooms worldwide. We also won the contract to supply signage to Infiniti in the Middle East region. In China, we continue to provide signage to fast food chains like Dairy Queen, Saizeriya and Yonghe Dawang; to hotel brands like Accor and IHG; and to the Agricultural Bank of China and Citibank China in the banking sector.
Another promising contract is the one with TOTAL Pakistan, involving 450 petrol stations that needed to be converted over an 18-month period starting this July.
We believe that the overall signage business is still robust despite the decrease in sales during this period.
The Museum, Themed Environment, Interior and Retail segment saw a reasonable level of improvement.
During the period, Pico successfully completed numerous projects including Beijing Cultural Creative Centre Visitor Gallery, Dinosaurs: Dawn to Extinction at ArtScience Museum in Singapore, Grundfos China corporate office in Shanghai and Guangzhou Radio Group showroom.
Pico will continue its work with Shanghai Disneyland throughout this year and well into financial year 2015. Other contracts to be completed in the latter half of financial year 2014 include Hangzhou Intelligence e-Valley, the Hub Zero Family Entertainment Centre in Dubai, the Saudi Arabia Water Gallery, the Singapore Air Force Museum, the Workforce Development Agency Gallery, National Gallery and Shimano Gallery in Singapore; the Survey and Land Registration Bureau Gallery in Bahrain, the Wanda Movie Theme Park in Nanchang, and Xinjiang Qinghua Industrial Park Sura Palace Gallery.
Furthermore, the Group has other interior fit-out contracts in the pipeline for this financial year, including the ENN Group showroom in Langfang China, the Fangda Group showroom in Shenzhen and the Yakult factory showroom in Guangzhou.
The Conference and Show Management segment performance met our expectations.
Pico has continuing contracts for a number of recurring shows and has added several new shows to our portfolio. Highlights include the 10th Congress of the Asia-Pacific Society of Hypertension in Cebu, 50Plus Expo in Bangkok and Singapore, the China International Electric Power and Electric Engineering Technology Exhibition in Shanghai and the Philconstruct in Manila.
The Group will deliver a number of high-profile shows later this year, including the INTERPOL World Series in Singapore, Manufacturing Technology World in Manila, ITMA Asia and CITME, and the EMTE-EASTPO Machine Tool Exhibition in Shanghai.
The most recent update to our hall management portfolio is the Group’s contract with the 133,731 square metre Chenzhou International Convention and Exhibition Centre in Hunan Province, the first exhibition hall in Chenzhou city.
Prospects
Looking ahead, we expect our business in Asia to remain a key driver of growth. Upcoming highlights of the latter half of this year include the Mobile Asia Expo in Shanghai, Singapore National Day Parade and the Singapore Garden Festival. Apart from entering the second year of our renewed five-year contract with the Formula 1 Singapore Grand Prix, Pico will be handling high-profile events in China for various car brands and tech giants like Google and Tencent.
Another exciting update to Pico’s portfolio is our involvement with the cutting-edge 35-hectare Singapore Sports Hub — an integrated venue for sports and entertainment - which will begin operations in June 2014. Our joint venture company, Global Spectrum Asia has been appointed as the management company for this new facility. In addition, Pico has been appointed as the commercial signage provider for corporate sponsors of the Sports Hub itself as well as for the Singapore Indoor Stadium; with work including technical design for all sponsors’ signage structures. We have also been appointed as the official interior fit-out provider for the Sports Hub’s National Stadium Club Executive Suites.
The Group opened an office in Yangon, Myanmar last year, and this year we began providing exhibition standfitting services to various exhibitors. We have also been appointed to provide significant event management services for the ASEAN Tourism Forum in 2015.
For the upcoming Expo Milano 2015, the Group won our first major contract to provide a comprehensive scope of services including construction, design, content development, publicity and operations management for the 2,047 square metre Malaysia Pavilion. Through our partnerships with industry leaders in Italy, we have also made significant progress in the upcoming ITMA show in Milan in 2015, which will be held in November after the closing of Expo Milano 2015.
The Group will, in addition to the Asian market, continue to pursue business opportunities in the Middle East, North America and Europe.
