New | Three Hong Kong-listed restaurant chains said revenues up as consumption, food scandals hit China
“In China, the slower-than-expected recovery in economic growth affected the consumption market, and the continuous food safety scandals had led to a rising concern over food safety among domestic consumers,” said Tsui Wah chairman Lee Yuen Hong
Three Hong Kong-listed restaurant chains, Tsui Wah Holdings, Café de Coral Holdings and Fairwood Holdings, reported growth in revenue despite weakening consumption and food scandals in China.
“In China, the slower-than-expected recovery in economic growth affected the consumption market, and the continuous food safety scandals had led to a rising concern over food safety among domestic consumers,” said Tsui Wah chairman Lee Yuen Hong.
Tsui Wah reported a robust 28.6 per cent growth in revenue to HK$893.45 million in the six months ended September 30, of which mainland revenue soared 65.4 per cent to HK$263.02 million. Hong Kong revenue rose 17.8 per cent to HK$623.42 million and Macau revenue grew 4.8 per cent to HK$7.01 million. Net profit grew 3.9 per cent to HK$88.86 million. Part of the reason for the slower profit growth is the hiring of more staff and rising property rentals. Tsui Wah will pay an interim dividend of 2 Hong Kong cents per share.
The net profit of Café de Coral inched up 0.1 per cent to HK$243.1 million in the six months ended September 30, while revenue rose 8.5 per cent to HK$3.7 billion. The company declared an interim dividend of 17 Hong Kong cents per share, the same as last year. The flat profit growth was due to higher administrative expenses and increased losses from joint ventures.
Higher food costs and weak consumer spending hurt the company’s Manchu Wok chain in North America, and Café de Coral will sell off its North American business for CA$7.89 million, said Café de Coral chief executive officer Sunny Lo Hoi Kwong.
Café de Coral’s Spaghetti House and spaghetti 360˚ restaurants were affected by the slowdown in retail sales growth and the specialty restaurants sector in Hong Kong, Lo said.
“Entering the second half of the year, we maintain a cautious view on the company’s full-year performance. Higher operating costs and the challenging business environment seen in the first half will likely continue,” Lo added.
Fairwood’s net profit rose 12.1 per cent to HK$75.3 million in the six months ended September 30, while revenue grew 11.4 per cent to HK$1.13 billion. The company will pay an interim dividend of 28 Hong Kong cents pre share, 21.7 per cent more than last year.
“During the review period, the company has consolidated its mainland China business. Underperforming stores were closed; while more efforts and resources were placed on well-established profit-making stores in first-tier cities. The overall performance of the mainland China business has subsequently improved, with notable growth in same-store sales,” said Fairwood executive chairman Dennis Lo Hoi Yeung.
