Year ended 31 March
Sales of package tours
Margin income from sales of FIT products
Margin income from sales of ancillary travel related products and services
Gross Profit Margin
(Loss)/profit and total comprehensive (loss)/income for the period attributable to owners of the Company
Basic (loss)/earnings per share (HK cents)
HONG KONG, CHINA - Media OutReach - 13 June 2017 - WWPKG Holdings Company Limited ("WWPKG", together with its subsidiaries, the "Group"; HKSE: 8069), a leading travel agent in Hong Kong, announced its results for the year ended 31 March 2017 (the "Year 2017"). During the Year 2017, WWPKG recorded total revenue of approximately HK$390.8 million and a loss and total comprehensive loss attributable to owners of the Company of approximately HK$14.2 million. Excluding the non-recurring listing expenses, the profit and total comprehensive income attributable to owners of the Company for the Year 2017 would be HK$0.7 million.
The Group's revenue from package tours decreased by 13.9% from HK$443.9 million for the year ended 31 March 2016 to HK$382.1 million for the Year 2017. The decrease in revenue was mainly due to the decline in sales of Japan bound tours during the first half of the Year 2017 by 23.2% as a result of (i) the negative impact of the Kumamoto earthquake occurred in April 2016; (ii) the fact that the continued appreciation of Japanese Yen against Hong Kong Dollars between April 2016 and September 2016 coupled with the intense competition within the industry, particularly from online agencies and booking platforms of airlines and hotels which are introducing aggressive marketing campaigns and promotion programmes, have reduced the demand of customers who are cost conscious for the Group's package tours bound for Japan; and (iii) that in view of the decreased demand and the fierce industry competition, the Group adjusted downward the selling prices of its Japan bound tours in order to attract customers. Tours bound for Japan accounted for 84.6% of the Group's total revenue from package tours. Hence, the appreciation of the Japanese Yen during the aforementioned period, which increased the Group's land costs (as part of its cost of sales) per customer, and the Group's downward adjustment of selling prices of its Japan bound tours during the first half of the Year also exerted pressure on the gross profit of the Group.
FIT products generally include air tickets, hotel accommodations and combination of both. The Group's revenue from FIT products decreased from HK$4.0 million for the year ended 31 March 2016 to HK$2.7 million for the Year 2017 mainly due to keen competition from booking platforms of hotels and budget airlines, as well as the fact that the Group's new online sales platform, one of the key purposes for which is to cater for the increasing trend of booking air tickets and hotel accommodations online, was not fully launched until December 2016 and was subject to further major enhancements.
Ancillary travel related products and services
Ancillary travel related products and services mainly include travel insurance, admission tickets to attractions such as theme parks and shows, local transportation such as airport transportation, railway tickets and transportation passes. The Group's revenue from ancillary travel related products and services increased from HK$4.7 million for the year ended 31 March 2016 to HK$6.0 million for the Year 2017 due to increase in sales of Japan rail passes and margin income from insurance companies for the sales of travel insurance to customers.
The Shares were successfully listed on GEM of the Stock Exchange on 12 January 2017. The Board considers that such public listing status will help to promote the Group to potential customers and enhance its corporate profile and credibility with the public and business partners. This in turn will strengthen the Group's competitiveness and benefit its business performance and growth.
Going forward, with the Group's long-established brand name, well-maintained business relationships with suppliers, ability to respond to adversities, and healthy net assets position, the Group will continue to execute its business strategy to expand both revenue streams and customer base in the following manner:
During the Year 2017, the Group successfully negotiated with its major airline supplier to develop a regular route to Komatsu, a new destination in Japan, as a result of which customers were able to experience new itineraries for Hokuriku and Chubu regions. The Group will continue its efforts in exploring new routes with airline suppliers to less touched areas particularly in Japan, so as to attract travellers of Hong Kong to new destinations in that country. The Group has also been appointed as the exclusive ticketing agency for Legoland Japan in Hong Kong, which opened in April 2017. For all of its existing tours, the Group will continue to refine and/or redesign its tours with new itineraries, activities and hotel accommodations with the view to bringing better travel experience to its customers.
The Group's progress in the revamp of its website and the incorporation of an integrated online sales platform has been on track. During the Year 2017, the Group's customers were able to make booking of package tours and purchase air tickets, hotel accommodations and certain ancillary travel related products and services online. A number of further major enhancements to the online sales platform, in particular the FIT-air tickets module, the FIT-hotel accommodations module and the ancillary travel related products and services ( 當地享樂) module, are in progress or in the pipeline. These enhancements include (i) improvements on the content layout design and graphics display; (ii) refinements on search boxes, product selection fields and calendar view and eligibility of non-member purchases; and (iii) addition of sales and marketing functions of promotion codes, online chat function and customer feedback survey. The Group also plans to implement its mobile application software. With the completion of the aforementioned enhancements and the future implementation of its mobile application software, the Group's integrated online sales platform will be able to offer a wide range of products and will satisfy most of the travel needs of its customers as a user-friendly and informative one-stop shop. This will eventually distinguish the Group from most of the online agencies and booking platforms of airlines and hotels which generally only offer air ticket and/or hotel accommodation bookings.
(3) Focus on marketing efforts to raise brand awareness
In view of the increasing use of the internet for travel booking and in order to correspond with the introduction of the Group's online sales platform, the Group launched a two-year digital marketing campaign in August 2016 to promote its brand and travel products through various online social medium and search engines. Continuing the momentum, the Group plans to boost its marketing efforts especially on digital marketing. Through advertising on social media and search engine marketing, the Group aims to increase online channel presence and online traffic and drive online inquiry to its product offerings. The Group plans to do so by building promotions for interested groups, developing special FIT products and package tours and building fans following from interested groups. Digital marketing will allow the Group to deliver its advertising messages directly to targeted group of potential customers and effectively push new promotions. The Group's plan involves continuously tracking implementation and reviewing performance, and data accumulated will be used to develop look-a-like audience and to retarget previously interest users with new attractive offers. The Group aims to digitally transform itself into a leader in local travel e-commerce in the future.
The Group received positive reviews from its collaboration with its spokesperson, including the sponsorship of two series of television travel programme hosted by the spokesperson and the spokesperson's guest appearance in one of the Group's luxurious five-day hot spring and gourmet tour, during the Year 2017. The Group plans to continue to collaborate with its spokesperson to raise the awareness of the Group's brand and enhance the popularity of its products through travel television programme, social media and other conventional media advertisements such as newspapers and television commercials.
The Group will try its best endeavor to implement the above strategic initiatives that will enable the Group to grow and move forward.
About WWPKG Holdings Company Limited
WWPKG is founded in June 1979. The Group has become one of the long-established and well-known local travel agents, with 37 years of business in the travel service industry in Hong Kong under the brand "縱橫遊". Its major business is the provision of outbound package tours with particular focus in Japan bound tours. The Group also offers other travel products and services to customers including free independent traveller (FIT) products and other ancillary travel related products and services.
Currently, the Group sells products and services through a number of channels including four branches in Causeway Bay, Tsim Sha Tsui, Mongkok and Shatin, as well as online sales platform. The Group also sells tailor made tours to customers through MICE tour department, as well as sells travel products to other travel agents in Hong Kong and Macau.
According to the industry research report, the Group was the second largest travel agent in Hong Kong in terms of number of travellers for package tours bound for Japan in 2015, and ranked eighth in terms of number of travellers for outbound package tours amongst the travel agents in Hong Kong which provided outbound package tours in 2015.