Chairman Claims Performance Sustained Amidst Macau's Lagging Construction Market Due to Unwavering Team Efforts
Revenue increased 4.3% to MOP112.2M
Profits up 6.1% to MOP10.56M
HONG KONG, Aug. 29, 2017 /PRNewswire/ -- Lai Si Enterprise Holding Limited ("Lai Si Enterprise" or "the Group", HKSE stock code: 2266, a limited company incorporated in the Cayman Islands), Macau's leading commercial fitting-out contractor announced its first half-year performance since listing. In the six months ended 30 June 2017, the Group reported an unaudited revenue of MOP112,235,000, a 4.3% increase compared to the same period last year (2016 fiscal year: MOP107,576,000); its unaudited gross profit was MOP33,855,000, a surge of 14.8% compared to same period last year (2016 fiscal year: MOP29,484,000). After deducting the listing expenses of MOP3,013,000 and other operating expenses during this period, the Group's unaudited adjusted profit attributable to owners of the Company was MOP10,563,000, a 6.1% rise from the same period last year (2016 fiscal year: MOP9,952,000); the Board resolved not to declare payment of any interim dividend (2016 fiscal year: nil).
Dividend withheld for business development; Expects to distribute year-end dividends
Mr. Lai Leng Man, Chairman and Executive Director of Lai Si Enterprise remarked, "During the period of review, the fitting-out and construction market in Macau saw sluggish growth, and the operating environment was impacted by an increase in unforeseen factors. Fortunately, the Group was able to secure business growth due to unwavering team efforts and its success in expanding into the Hong Kong market, having landed on a fitting-out contract worth around HKD86 million within the first six months. The Board exercised their discretion to withhold payment of the interim dividend in order to retain financial strength for further business development. We expect to reward shareholders with year-end dividends by our first annual performance review."
Inclusion into the MSCI Hong Kong Micro Cap Index Boosts Investor Confidence
Mr. Lai continued, "In early 2017, the Group became listed on the Main Board of the Stock Exchange of Hong Kong, and was included as a constituent of the MSCI Hong Kong Micro Cap Index with effect from 31 May. This signifies that Lai Si Enterprise has springboard into the international capital market as the investment target of funds and institutional investors, which we believe will drive business expansion, increase customer confidence, boost our competitiveness and expand our business scope."
Post-typhoon Macau: Undertaking urgent reparation works
Mr. Lai added, "Macau has suffered a heavy blow from two consecutive typhoons since last week. As a leading commercial fitting-out contractor based in Macau, we would like to convey our deepest condolences for the deceased victims, and salute those who have devoted themselves to restoring order in the city. As an engineering contractor, Lai Si Enterprise has allocated extra manpower and equipment to undertake several urgent reparation works in Macau. We want to do our small part by promptly repairing the construction damages inflicted on travel and retail sectors, so they can get back in business sooner."
Performance by business segment
During the six months ended 30 June 2017, the total value for the new fitting-out projects awarded to the Group, representing the aggregate awarded contract sum, amounted to approximately MOP29.2 million (compared to MOP70.0 million for the six months ended 30 June 2016). As at 30 June 2017, the Group had an aggregate value of backlog for fitting-out projects and construction projects of approximately MOP110.1 million (compared to approximately MOP97.2 million for the six months ended 30 June 2016).
During the review period, the Group's revenue increased by approximately MOP4.6 million or 4.3%. The increase was attributable to increase in construction works which increased by approximately MOP21.8 million or 34.6 times and was partly offset by the decrease in fitting-out works of approximately MOP17.5 million or 16.5%. The significant increase in revenue from construction works was because the Group undertook a few sizeable construction projects during the six months ended 30 June 2017.
The Group's fitting-out services include construction drawing, materials sourcing, the provision of fitting-out works, onsite supervision, and subcontractor management as well as overall project management. The Group's customers for fitting-out works primarily include hotels and casino developers and owners, international retailers and restaurant owners. During the review period, the Group's unaudited revenue from fitting-out works made up 78.8% of the Group's total revenue, or MOP88,392,000, representing a 16.5% drop from last year.
Construction services under the Group include general construction and heritage conservation. Construction projects usually involve demolition works and construction work such as foundation engineering and the installation of construction equipment systems. During the review period, the Group's unaudited revenue from construction services surged 34.6 times to MOP22,437,000, which made up 20.0% of the Group's total revenue.
Repair and Maintenance Works:
Services provided by the Group include the repair or replacement of interior decoration parts such as lighting supplies, fixtures and the repair and maintenance of construction equipment systems. Key customers in this business segment include operators of hotels and casinos, retail shops and restaurants. During the review period, the Group's unaudited revenue from repair and maintenance works totaled at around MOP1.4 million, representing a 30.7% increase compared to the previous year and making up 1.2% of the Group's total revenue.
Looking to the future: Actively seizing market opportunities
Looking ahead, Mr. Lai Leng Man pointed out that Macau's hotels, casinos, retailers and offices will soon enter a peak period for renovation. Not only will those who have been hit severely by the typhoon need fitting-out and maintenance works, but their demand for renovation will also pick up quickly. As one of Macau's largest integrated fitting-out contractor and a general contractor with a well-established business network, Lai Si Enterprise is in a good position to take advantage of the growing demand to strengthen its business performance, while also enhancing its prime position and competitive edge in Macau's fitting-out and construction industry. The Group will actively increase its market coverage, continue to expand its foothold in Hong Kong's fitting-out market, and explore business opportunities in the Guangdong-Hong Kong-Macao Big Bay Area development project with a view of maximizing revenue for its shareholders."
About Lai Si Enterprise Holding Limited
Lai Si Enterprise Holding Limited is a leading commercial fitting-out contractor in Macau. Its major businesses include provision of fitting-out works, and serving as the main contractor for construction works and repair and maintenance works, mainly in Macau. According to Frost & Sullivan, in terms of revenue, the Group was the second largest commercial fitting-out contractor in Macau in 2015, with a market share of approximately 6.1%. The fitting-out projects it undertakes, classified according to customer types, include hotels and casinos, retail shops, restaurants and others. The Group's construction services mainly include general construction and heritage conservation. The Group also provides repair and maintenance services to existing properties in Macau on ad-hoc basis or regularly over a fixed period.
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