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- Increase in Revenue from Retail Business and Operations Services
- Successful Transfer of Listing from GEM to Main Board
- Diversifies the Business and Develops E-commerce Platform
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HONG KONG, June 27, 2017 - (ACN Newswire) - Telecom Digital Holdings Limited (the "Company" or "Telecom Digital"; stock code: 6033) and its subsidiaries (the "Group"), a leading comprehensive telecommunications service providers in Hong Kong, has announced its audited annual results for the year ended 31 March 2017 ("FY2017" or the "Year Under Review"). The Group had successfully transferred its listing from the Growth Enterprise Market ("GEM") to the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK") in May 2017, which marked a significant milestone in its development.
During the year under review, the Group's profit amounted to approximately HK$95.7 million (2016: HK$89.8 million), rising by 6.7% year-on-year. The favourable performance could be attributed primarily to an increase in revenue from the Group's retail business coupled with the provision of operations services to Sun Mobile Limited ("SUN Mobile"). Revenue for the year under review amounted to approximately HK$1.1 billion (2016: HK$1.4 billion). This decline was mainly due to the decrease in revenue generated from distribution business and partly off-set by the increase in revenue generated from the retail business and operations services.
The Board has declared the fourth interim dividend of HK5.0 cents per Share. Together with the interim dividend of HK13.0 cents per Share already paid, total dividends for the year amounted to HK18.0 cents per Share, representing an annual payout ratio of 75.0%.
Mr. Cheung King Shek Alex, Chairman and Executive Director of Telecom Digital Holdings Limited, said, "The Group has successfully transferred its listing to the Main Board of SEHK, adding a remarkable milestone to our history and development. It will not only further raise our profile, but also enhance recognition of our business and increase financing flexibility. Although the mobile service industry has become more crowded over the past year, the Group managed to achieve satisfactory results in FY2017 by leveraging our well-established shop network, professional sales team and close ties with SUN Mobile as well as renowned mobile phone manufacturers."
During the year under review, the two primary revenue contributors to the Group continued to be retail sales of mobile phones and provision of operations services to SUN Mobile, representing approximately 48.0% and 26.6% of the Group's total revenue respectively. With an expanded presence, the retail business achieved revenue growth of 8.1% over the corresponding period of last year and amounted to HK$524.6 million. Revenue from the provision of operations services to SUN Mobile, an associate owned as to 40% by the Group and as to 60% by HKT Limited, climbed by 26.1% year-on-year to HK$290.4 million. As SUN Mobile continues to launch different service plans to attract customers, the number of customers keeps growing. Benefitting from the increase in average revenue per user and in the light of the stable customer growth, the Group's administrative and operations services has become more cost efficient and therefore the growth in services fees is expected to continue.
Revenue from the distribution of mobile phones for the year under review was approximately HK$195.9 million (2016: HK$616.1 million), representing approximately 17.9% of the Group's total revenue. The decrease of revenue in this segment mainly due to the change in distribution model of a mobile phone manufacturer. The Group and the manufacturer had agreed not to renew the service agreement upon its expiration in August 2016. The Group has seized other business opportunities and has become the distributor of mobile devices for other mobile phone manufacturers during the year.
In view of the popularity of various mobile communications channels and the ongoing migration of users to the internet and mobile communications devices, the Group has strategically scaled down the paging and Mobitex-based services business. Revenue from the provision of paging and other telecommunications services business declined to approximately HK$81.3 million, representing approximately 7.5% of the Group's total revenue.
To increase revenue and raise public awareness of the brand, the Group has relocated certain shops and expanded others that are located in prime locations. Over the past year, the Group has acquired two shops that will be used for enhancing its retail network. The Group considers both acquisitions as ideal opportunities for securing desirable retail spaces in Hong Kong, which will enable it to reduce its exposure to rent fluctuations as well as advance its business development. Further to that, the Group has announced that on 21 June 2017, a provisional agreement in relation to the proposed acquisition at a consideration of HK$30,000,000 was made to purchase aother property and intends to use it as one of its retail shops. As at 31 March 2017, the Group operated 69 shops across Hong Kong with a total of approximately 300 front-end staff.
Through the Customer Relationship Management (CRM) system and Enterprise Resource Planning (ERP) system newly launched in the last quarter of the year, the Group is able to keep abreast of the needs of the target customers and better understand their spending behaviour, and thus improve the sales performance and raise overall operational efficiency. Yet another benefit of the systems includes the use of collected data to diversify the Group's business and develop its e-commerce platform.
Looking ahead, the Group will continue to bolster its retail network, relocate and expand the size of certain shops. Not merely attentive to the physical space, the Group is also quality-focused, hence it will seek to continuously improve the knowledge and level of service of its staff.
To diversify its business and fully utilise its extensive retail network, experienced sales force and logistic system, the Group has actively explored business opportunities to broaden its assets and revenue base. As it fully recognises the importance of developing its e-commerce platform, to raise the appeal of such a platform and generate revenue from its B2C operation, the Group will enhance the platform's accessibility via the internet, mobile apps and multi-media terminals at its shops, as well as other online to offline networks.
Mr. Cheung King Fung Sunny, Chief Executive Officer & Executive Director, concluded, "Aside from enhancing our retail network and sales team, the Group is also committed to developing the O2O business as well as evaluating other business opportunities. In the face of rising competition, we will redouble our efforts on enhancing all facets of operations so as to be in a strong position for seizing greater market share and boosting brand equity. By remaining open to new business possibilities and trends, we can make further strides forward and achieve long-term growth."
Topic: Press release summary
Source: Telecom Digital Holdings Limited
Sectors: Daily Finance, Cloud & Enterprise, Daily News
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From the Asia Corporate News Network
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