Best Mart 360 Interim Results, Revenue and net profit increased by 20.0% and 34.8% YoY

Strong points:

• Revenue increased by 20.0% to approximately HK$1,237.8 million.

• Gross profit increased by 22.4% to approximately HK$446.3 million, and gross profit margin increased by 0.8 percentage points to 36.1%.

• Profit attributable to owners of the Company increased by 34.8% to approximately HK$110.6 million.

• As of September 30, 2023, the Group operated a total of 165 retail store chains, an increase of 21 stores compared to the corresponding period last year.

• Basic earnings per share were 11.1 HK cents. The board of directors has recommended the payment of an interim dividend of 8.0 Hong Kong cents per share.

Financial Highlights:

HONG KONG SAR – OutReach Media – November 28, 2023 –
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 the Hong Kong Special Administrative Region (” Hong Kong”), announced its interim results for the six months ended September 30, 2023 (“the period under review”). During the period under review, revenues recorded by the Group amounted to approximately HK$1,237,781,000, an increase of approximately 20.0% compared to approximately HK$1,031,896,000 for the six months ended on September 30, 2022 (the “Relevant Last Year Period”). The profit attributable to the owners of the Company amounted to approximately HK$110,636,000 during the period under review (for the six-month period ended September 30, 2022: approximately HK$82,049,000), representing a period-over-period increase of approximately 34.8%.

During the reporting period, the Group’s gross profit and gross profit margin were approximately HK$446,265,000 and 36.1%, an increase of 22.4% and 0.8 percentage points from gross profits of approximately HK$364,712,000 and gross profit margin of approximately 35.3%. for the corresponding period of last year, respectively. This increase was supported by the Group’s strategy of constant expansion, increased presence in strategic store locations, judicious adjustment of sales tactics coupled with optimization of the product mix during the period under review.

During the period under review, the Group’s basic earnings per share were approximately 11.1 Hong Kong cents (for the six months ended September 30, 2022: 8.2 Hong Kong cents). The board of directors has recommended the payment of an interim dividend of 8.0 Hong Kong cents per share.

ACTIVITY REPORT

RETAIL STORE CHAINS

As of September 30, 2023, the Group operated a total of 165 retail chains (September 30, 2022: 144 stores), including 156 retail chains, 7 retail chains and 2 retail chains in Hong Kong , Macau Special Administrative Region (“Macau”) and the People’s Republic of China (“PRC”), respectively (September 30, 2022: 136 stores, 6 stores and 2 stores, respectively). During the period under review, the Group has been following our store optimization strategies, which include expanding store spaces, providing a better shopping environment and integrating in-store display with our diverse product range to improve the brand image. The Group continues its search for stores in different neighborhoods to expand its commercial coverage.

The Group launched a new global wine and food store “FoodVille” in 2021, which focuses on mid-to-high-end global quality food products, including fine wines from around the world, premium chocolates , health foods, frozen foods and western sauces. and ingredients, etc., in order to meet the market’s pursuit of high quality of life and expand the Company’s customer base. As of September 30, 2023, the Group operated 6 stores (September 30, 2022: 3 stores) under the relevant brands.

For the six months ended September 30, 2023, the ratio of rental expenses (on a cash basis) to turnover of the Group’s retail stores was approximately 9.8% (for the six months ended September 30, 2022: approximately 10.4%), a decrease of approximately 0.6 percentage points compared to the corresponding period last year.

PRODUCTS

During the period under review, the Group adhered to its global sourcing policy by sourcing a wide range of products from around the world in order to offer a diverse range of choices to customers. During the six months ended September 30, 2023, the Group sold more than 1,140 brands and more than 3,400 product references in total, offering customers a diverse range of choices. The Group continues to optimize its product portfolio, abandoning older products to make way for the newest products and flavors to keep pace with evolving customer demands.

In order to enrich our product mix, improve the efficiency of product quality and supply control and increase profitability, the Group continued to actively develop its own-brand products during the period, recording a net increase of 183 references. For the six months ended September 30, 2023, sales from private label products were approximately HK$192,986,000 (for the six months ended September 30, 2022: approximately HK$151,064,000), representing an increase by approximately 27.8% compared to the corresponding period last year. and represented approximately 15.6% of the Group’s overall turnover for the period under review. The Group has a total of 11 private brands and approximately 214 product references during the period under review, including masks, canned Chinese specialties, cereals, milk, honey, nuts and dried fruits, as well as a wide range of leisure food products.

MEMBERSHIP PROGRAM AND MARKETING AND PROMOTIONAL ACTIVITIES

As of September 30, 2023, the Group’s number of registered fans and members stood at 2,087,700 (September 30, 2022: approximately 1,931,400), representing a period-over-period growth of approximately 8.1 %. The number of members of the mobile application reached approximately 980,000 as of September 30, 2023, representing an increase of approximately 20.2% compared to approximately 815,100 in the corresponding period last year.

This year marks the 10th anniversary of the creation of the Group. The Group has carried out various marketing and promotional activities, including a series of special offers on selected quality products to express our gratitude for our customers’ support over the years, which has significantly increased discussions about the Group on the market.

EMPLOYEES

As of September 30, 2023, the number of full-time and part-time employees in the Group was 1,226 (September 30, 2022: 1,167). In order to retain staff and appropriately motivate Group employees in order to increase staff cohesion and loyalty, the Group regularly reviews and updates its employee benefit plans and remuneration packages based on labor market supply and the evolution of labor costs, as well as performance. The Group’s personnel costs (excluding executive emoluments) for the six months ended September 30, 2023 represent approximately 9.1% of revenue (for the six months ended September 30, 2022: approximately 9.4%), i.e. decrease of approximately 0.3 percentage points compared to the corresponding period last year.

OUTLOOK

At the beginning of this year, the Hong Kong government officially eased restrictions on the entry of tourists as well as local anti-epidemic measures, encouraging the recovery of Hong Kong’s tourism and retail sectors and revitalizing the mood of the business market. The Group, with a cautious and optimistic outlook, will continue to explore different development opportunities, closely monitor market developments and quickly adjust its business strategies, in order to maximize returns for shareholders and investors.

Looking ahead, although the pace of global economic recovery is expected to slow due to the high interest rate environment and geopolitical tensions, it is estimated that the Hong Kong government’s various measures will provide some support to the market local consumption. The Group plans to pragmatically expand its retail network, aiming to achieve a net increase of 15 to 20 retail stores per year to meet the diversified demands of different customer segments for food products of quality as part of our “dual brand” model. The “Best Mart 360°” brand will mainly target the mass market, while the “FoodVille” brand will target the mid-high end market. By leveraging the diversified product structure and store atmosphere, the Group will strengthen the differentiation of the two brands and thus attract a wide range of customers.

The Group completed the introduction of China Merchants Hoi Tung Trading Company Limited (the “CMHT”) as a major shareholder during the period under review. The Board of Directors believes that with the substantial strategic support of CMHT, the Group’s commercial development will be further accelerated, promoting sustainable growth and maximizing synergies. The Group will continue to respect its commercial mission by offering its customers products offering the “best quality” and the “best price”. By leveraging CMHT’s extensive cooperation network and resources, the Group will strive to improve its supply chain, optimize its sales categories and maintain its price competitiveness. Additionally, the Group will proactively source a diverse range of food products from around the world and accelerate the development of its private label products, aiming not only to satisfy market demand for essential products, but also to offer customers a wider range of choices.

On the other hand, thanks to CMHT’s strong network of food distributors, the Group will continue to develop its business-to-business (B2B) segment by offering a more diversified range of products to other retailers in Hong Kong, to boutiques in online and even to merchants or businesses in foreign markets, thus enriching the Group’s revenue streams and potential customer base.

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The issuer is solely responsible for the content of this announcement.