Newsroom

• Unprecedented pandemic had a major impact on the Group’s business and reversed its continuous growth trajectory. Nevertheless the Group remained profitable in this very difficult environment
• Pico’s digital transformation strategy endowed the Group with the timely capability to pivot swiftly to virtual and hybrid events and other digital solutions to clients

Financial Highlights 

• Revenue decreased by 31.5% to HK$3,438 million
• Gross profit decreased by 26.2% to HK$1,125.5 million
• EBITDA decreased by 60.2% to HK$179.3 million
• Full year dividend of HK2.5 cents; Dividend payout ratio is 61.3%
• Basic earnings per share of HK4.08 cents
  
  

*Before a change in remeasurement of contingent consideration 

(Hong Kong, 26 January 2021) Pico Far East Holdings Limited (‘Pico’, ‘the Company’ or ‘the Group’, Stock code: 752.HK), a leading global total brand activation company, today announced its 2020 annual results for the 12 months ended 31 October 2020.

Year 2020 was challenging and disruptive for the world, with the COVID-19 pandemic adding to the headwind of an already challenging global economy. Almost no industry was unaffected by the pandemic. The unprecedentedly adverse global operating environment had a major impact on the Group’s business and reversed its continuous growth trajectory. Nevertheless the Group remained profitable in this very difficult environment.

Calibrated by the timing and degree of impact on the Group’s various market segments, the Group quickly implemented extensive cost saving, credit control and cash preservation measures to weather the current crisis after the first quarter of the financial year under review. These efforts to right size operations resulted in significant savings in the Group’s regular overhead costs. However, the effect was partially offset by the first-time inclusion of a full year of financials of two newly acquired businesses in the middle of 2019 and the special mega project, Expo Dubai, in the financial year under review.

With the exception of the Museum, Themed Environment, Interior and Retail segment which experienced some minor delays due to COVID-19 lockdowns, all other three business segments – Exhibition, Event and Brand Activation, Visual Branding Activation and Meeting Architecture Activation were adversely affected by the COVID-19 travel restrictions and lockdowns implemented worldwide.

During the year under review, the Group reported total revenue of HK$3,438 million (2019: HK$5,017 million), representing a 31.5% decrease compared to the same period of the previous year.

Profit from core operations was HK$115.1 million (2019: HK$389.5 million), a 70.4% decrease compared to the same period last year. Profit for the year attributable to owners of the Company decreased by 80.3% to HK$50.5 million (2019: HK$256.8 million).

The Directors recommend payment of a final dividend of HK2.5 cents (2019: HK9.0 cents) per ordinary share. The total dividend for the year of HK2.5 cents (2019: HK13.5 cents) per ordinary share represents 61.3% of the year’s basic earnings per share of HK4.08 cents (2019: HK20.76 cents).

It is apparent that COVID-19 will permanently reshape the Group’s business landscape. Pico has embraced this challenge by redesigning its business and transforming its business model with five overarching strategies:

1. Improving organisational agility by implementing more flexible cost structure and creating supply chain resilience to sustain its business through disruptions and crises
2. Accelerating adoption of new technologies and digital transformation
3. Transforming its business model to an experience-led, digital-first business
4. Aligning with consumer trends by investing in a content creation and community building business
5. Talent acquisition and development

Operations Review

Outlook

The Group is certain that the pandemic will continue to impact its business in 2021, and that its effects will be felt in the years beyond. It has already been a disruptive influence on economies, healthcare, governments, education, and indeed on the entire way of life.

In the more than 50 years since the establishment of Pico Group, it has overcome numerous crises and continually transformed its business to sustain its lead in the markets the Group is in. Consequently, though the COVID-19 crisis significantly affected its business, the ‘Drive Change, Go Digital and One Pico’ strategies the Group implemented several years ago have allowed the Group to promptly adjust its operation and pivot its business solutions physically and digitally for brand activation. The Group has since activated several notable virtual and hybrid events to its clients’ satisfaction.

China’s economic recovery, driven by rising domestic demand, is expected to provide a significant opportunity for the Group into 2021.

In the pipeline are contracts for numerous brand activations, digital and virtual events in China and many other countries. The Group’s contracts for Expo Dubai, including the national pavilions of Algeria, Brazil, Czech Republic, Malaysia, Malta, Peru and the UK, as well as corporate and thematic pavilions – some 20 pavilions in all will continue. The event’s opening is postponed to October 2021.

Despite all the post-pandemic uncertainty, one thing is clear; brand activation will continue to be the engine that powers the Group’s global growth. The Group is confident that it will emerge stronger, striving to deliver even more value to its clients and shareholders, and with greater prospects for sustainable growth.

Full announcement is available at: https://www.pico.com/en/investors#company-announcement