Resilient Business Performance amid Volatile Uncertainties
Revenue Increased by 0.5% YoY to HK$4,204.8 million
Adjusted EBITDA Increased by 21.0% YoY to HK$295.0 million
|For the year ended 31 March||FY2023 |
|Profit after tax||23.5||83.7||(71.9%)|
|Adjusted EBITDA (Note2)||295.0||243.8||21.0%|
|Adjusted Profit after tax(Note2)||78.4||64.3||21.9%|
Note 1: Earnings before interest, taxes, depreciation and amortisation (“EBITDA”)
Note 2: Adjusted EBITDA and Adjusted Profit after tax excluded the additional inventory provision for the Group’s Malaysia operation of HK$54.9 million in the current year and one-off gain on remeasurement of an existing interest in an associate upon a business combination of HK$19.4 million in last year.
(29 June 2023 – Hong Kong) A leading technology, brand, and manufacturing company and an enabler of smart and sustainable living, Computime Group Limited (the “Company” or “Computime”, together with its subsidiaries, collectively the “Group”; stock code: 320.HK) is pleased to announce its annual results for the year ended 31 March 2023 (the “Year” or “FY2023”).
Despite the challenging environment, the Group continued to invest in technological innovations and expand the global footprint. This strategy allowed the Group to retain existing customers and ensure order volume. Revenue increased to HK$ 4,204.8 million in FY2023, compared to HK$4,184.8 million for the Year ended 31 March 2022 (“FY2022”). Due to the Group’s relentless effort to control costs and minimize the negative impact of uncertainties, the gross profit excluded the additional inventory provision for the Group’s Malaysia operation of HK$54.9 million in FY2023 increase to 13.4% to HK$563.7 million (FY2022: HK$537.3 million) compared to last year. The overall gross profit margin, including the additional inventory provision, remained at 12.1% (FY2022: 12.8%), showcasing the Group’s resilience in a volatile market.
In response to severe global material shortages, the Group strategically increased inventory holdings of essential components, ensuring timely order fulfillment and delivery, including inventories in Malaysia. The Group made additional inventory provisions for Malaysian operations as inventory movement was slower than anticipated. Additionally, a one-time gain from remeasuring of existing interests in Braeburn’s business occurred in FY2022. The Group’s profit for the Year decreased by 71.9% YoY to HK$23.5 million (FY2022: HK$83.7 million) and EBITDA saw an 8.7% YoY decrease to HK$240.2 million (FY2022: HK$263.1 million). Excluding additional inventory provisions and the remeasurement gains from the Braeburn acquisition, Adjusted Profit after tax1 rose by 21.9% to HK$78.4 million, and Adjusted EBITDA1 grew by 21.0% to HK$295.0 million.
The Group maintained financial stability to manage macro environment risks and enhance debt management capabilities. The Group’s gearing ratio2 remained at an optimal level of 46.8% (FY2022: 40.8%). Net cash improved significantly by 36.4% compared to the previous year (FY2023: HK$84.3 million; FY2022: HK$61.8 million). This increase in net cash supports the Group’s future expansion.
Overall, the Group maintained stable operations, secured consistent order volumes and retained customers, thereby demonstrating our business resilience. The Group anticipates improvements as supply chain stability is achieved and inventory turnover accelerates. The Group plans to revamp material and order management processes, adopt the Lean Manufacturing Model and reduce overhead costs to enhance efficiency.
1. Adjusted EBITDA and Adjusted Profit after tax excluded the additional inventory provision for the Group’s Malaysia operation of HK$54.9 million in the current year and one-off gain on remeasurement of an existing interest in an associate upon a business combination of HK$19.4 million in last year.
2. Calculated based on the net debt divided by the equity attributable to owners of the Company plus net debt. Net debt is the sum of interest-bearing bank borrowings, trade and bills payables, and other payables and accrued liabilities, minus cash and bank balances and time deposits with an original maturity of three months or less when acquired.
The Group has two segments: Control Solutions Business and Branded Business.
The Control Solutions Business specializes in providing design, engineering, technology, and manufacturing services, including Original Equipment Manufacturer (“OEM”) and Original Design Manufacturer (“ODM”), to international branded customers. The Control Solutions Business provides a wide range of commercial and industrial applications, including home appliance controls, ventilation and air-conditioning controls (“HVAC“), smart home controls, industrial controls, and medical devices. During the Year, the Control Solutions Business managed to secure stable order volume and maintain revenue levels in the volatile environment, reaching HK$3,665.7 million (FY2022: HK$3,773.6 million) during the Year. The strong new business pipeline support secured many new projects, support the segment’s future growth.
The Branded Business segment includes the Salus and Braeburn house brands, which offer smart home, energy management, and net-zero home solutions to professional installers, property developers, utility companies, and wholesalers. Salus primarily focuses on the European market. Salus offers scalable and customizable eco-friendly smart home solutions to meet the growing demand for net-zero homes. Its product portfolio covers climate controls, EV chargers, backup batteries, solar panels, heat pumps, home security systems, and integrated software management tools that enable customers to optimize their energy usage at home.
Braeburn, acquired by the Group in December 2021, is one of North America’s most rapidly growing control solution brands. Braeburn’s sales network is primarily focused on the professional installer and wholesaler markets, and its product portfolio emphasizes energy-saving and smart HVAC solutions.
Combined with Salus, the Branded Business now covers Europe and North America, making the Group a global brand in energy management and smart home markets. The segment has recorded impressive growth, with revenue increasing by 31.1% YoY to reach HK$539.1 million. (FY2022: HK$411.2 million)
Business Review and Outlook
The Group has prioritized product development and technological innovation during the Year, focusing on smart and sustainable living solutions. Investments in research and development made across IoT/sensors, cloud infrastructure, connectivity, human-machine interface, artificial intelligence, and machine learning. Leveraging our core technological advantages, the Group developed a versatile product platform covering Electric Vehicle (“EV“) chargers, smart irrigation, robotics, professional security, AI climate control, and new form factor thermostats.
The Group dedicated to enhancing quality and efficiency by embracing innovative technologies and product development. With a strong in-house engineering team comprising over 500 members, the Group is well-positioned for technological innovation and product realization. The Group has also diversified its manufacturing base, with facilities strategically located in China, Malaysia, Vietnam, Mexico, and Romania, mitigating growing geopolitical risks and providing flexible manufacturing solutions.
Regarding outlook, Chairman and Chief Executive Officer of Computime Group Limited, Mr. AUYANG Pak Hong Bernard, commented, “Despite the challenging environment, we have positioned ourselves as a technology, manufacturing and brand leader in the smart and sustainable living markets. As a result, we are less affected by short-term economic factors and we maintain a cautiously optimistic position in our future outlook.”
Mr. AUYANG continued, “Our Control Solutions business segment will leverage our technological and manufacturing expertise to provide flexible solutions across the global markets, and dedicate resources to grow China market. The Branded Business segment will launch new Salus and Braeburn climate control products, aiming to broaden our customer base. We will enhance our net-zero home offerings and focus on business improvement, cost control, and resource optimization. Our technology and product roadmap focuses on expanding our HVAC market position and increasing AI use in smart products. Our ultimate goal is to improve society’s quality of living and move towards a more environmentally-conscious future.”
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