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CEC INT'L HOLD (00759.HK) Freezes Major Investment Plans, Citing Inability to Predict When Will Retail Mkt Rebound
CEC INT'L HOLD (00759.HK), the operator of retail chain 759 STORE, commented in its annual report that Hong Kong retail market is currently facing a series of unprecedented cha...
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CEC INT'L HOLD (00759.HK) Freezes Major Investment Plans, Citing Inability to Predict When Will Retail Mkt Rebound
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CEC INT'L HOLD (00759.HK)  -0.001 (-0.625%)   , the operator of retail chain 759 STORE, commented in its annual report that Hong Kong retail market is currently facing a series of unprecedented challenges. The value of retail sales released monthly by the Hong Kong government indicated that local retail establishments of different goods and services are experiencing challenges to varying degrees. Even retailers of daily consumer goods, typically resilient in counter-cyclical economic environments, have reported considerable declines. At this stage, it is difficult for the group to predict when the retail market will bottom out and rebound. It is anticipated that the current challenging conditions may persist for an extended period.

In response to these market uncertainties, the management is exercising utmost prudence in operating the retail business. The group will freeze all large-scale investment plans and curtail all non-essential expenditures to maximize the effect of cost-saving. On top of that, the management is meticulously examining the performance data for each 759 STORE shop. Decisions regarding tenancy renewals will be based on actual shop performance. Concurrently, discussions are underway with landlords to explore potential rental adjustments that could create win-win opportunities for both parties.

On the other hand, the prevalence of vacant shop spaces across various districts in Hong Kong presents both a challenge and an opportunity. The management is actively identifying potential sites for new stores, with criteria focusing on rental costs, foot traffic, and appropriate shop size that meet the requirements of 759 STORE, aiming to capitalize on growth opportunities amidst these adverse conditions.

The company's revenue for the financial year ended April was $1.47 billion, down 13.2% YoY. A loss of $29.81 million was recorded, compared to a net profit of $49.57 million in the previous year, a turnaround from profit to loss. LPS was HK4.47 cents, and no final dividend was declared.

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