Emperor W&J Stages Strong Recovery in 2017; Achieves Double-Digit Topline Growth

Emperor

HONG KONG — Emperor Watch & Jewellery Limited (the “Group” or “Emperor W&J”) (Stock code: 887), a leading retailer of European-made watches and fine jewellery, announced its annual results for the year ended 31 December 2017 (the “Year”).

Driven by strong recovery in consumption sentiment, the Group’s total revenue increased by 11.9% to HK$4,075.1 million (2016: HK$3,641.8 million). Watch segment revenue increased by 13.4% to HK$3,238.6 million (2016: HK$2,856.7 million) and remained a key revenue contributor, accounting for 79.5% (2016: 78.4%) of the total revenue. Revenue from the jewellery segment increased by 6.5% to HK$836.5 million (2016: HK$785.1 million). 74.8% (2016: 76.8%) of the Group’s total revenue was contributed by the Hong Kong market. Revenue from Singapore market soared 43.3% to HK$374.0 million (2016: HK$261.3 million) and accounted for 9.2% (2016: 7.2%) of the Group’s revenue.

Gross profit grew by 19.8% to HK$1,089.2 million (2016: HK$909.0 million). The gross profit margin was lifted by 1.7 percentage points to 26.7% (2016: 25.0%), which was mainly attributable to stronger market demand for luxury watches.

Due to an improvement in sales momentum, enhanced gross profit margin and rental savings, the Group recorded a net profit of HK$159.7 million (2016: net loss of HK$64.8 million). Basic earnings per share was HK2.32 cents (2016: basic loss per share of HK0.9 cent). The Group recommended the payment of a final dividend of HK0.58 cent (2016: Nil) per share. Together with the interim dividend of HK0.17 cent (2016: Nil) per share, the total dividends for the Year are HK0.75 cent (2016: Nil) per share.

As at 31 December 2017, the Group had 80 stores (31 December 2016: 97) in Hong Kong, Macau, mainland China and Singapore.

During the Year, the Group continued to optimise its retail chain of “Emperor Jewellery” stores in mainland China, to seize the opportunities arising from the rapid growth of the jewellery market. Meanwhile, the Group further expanded the coverage of jewellery stores in domestic areas of Hong Kong, which helped with promoting brand exposure and seizing market opportunities of emerging shoppers.

In commemoration of its 75 years of distinguished history and craft, the Group was proud to present the “L’Atelier Cindy Yeung High Jewellery” collection. The design of this collection is inspired by Ms. Cindy Yeung, Chairperson and Chief Executive Officer of the Group. It was ceremoniously launched during the jewellery show in November 2017, to showcase the glittering gemstone pieces, revealing the brand’s unique jewellery aesthetics.

Ms. Cindy Yeung said, “After years of struggling against macro challenges, we are pleased to deliver a solid full-year results with double-digit topline growth. The progress of the business was not only built on positive momentum in the retail market, but also reflected our strong operational performance on every front including sales growth, cost control and inventory management.”

Ms. Yeung continued, “With the growing wealth among Chinese consumers, who remain our major customer group, the overall consumption sentiment is expected to be buoyant. Taking into account the strong fundamentals, coupled with ongoing urbanisation, expansion of the middle-class and rising income, we are optimistic regarding the market demand for luxury items in Greater China. To unleash the full potential in the market, we are planning to expand our presence in both watch and jewellery businesses as well as exploring new opportunities.”