Disposal of local property boosts Bossini’s H1 profit

Clothing retailer Bossini Holdings Ltd. expects its net profit to surge by up to 157 per cent year-on-year for the first half of the year, despite the company having posted a notable decrease in revenue from its Hong Kong and Macau markets, it told the Hong Kong Stock Exchange last week. ‘[The increase] was mainly due to a gain of approximately HK$267 million (US$33.2 million) on the disposal of property and leaseback arrangement recognised in profit and loss of the Group for the year ended 30 June 2016,’ the retailer explained in the filing. This refers to the company’s three-storey property in Avenida do Infante D. Henrique on the Macau Peninsula, which is currently one of its retail stores in the city. In March, the company announced its intent to sell the property to investment holding company Deep Thought Investment for a consideration of HK$350 million, claiming the disposal ‘gives a good opportunity to realise its investment with considerable gain’. Nevertheless, the retailer added in the filing last week that the group would have registered a decrease in interim net profit of 75 per cent to 85 per cent for the period, if the aforementioned gain had not been included. ‘Such expected decrease in profit was mainly caused by the significant decrease in revenue and gross profit attributable to less visitors and strong Hong Kong dollar, which led to less consumption from them in Hong Kong and Macau,’ the company wrote. It added that weak local consumer sentiment, unseasonably warm winter weather and intensified competition in several core markets where the Group operates, had also driven down its total revenue for the period. For the first half of 2015, the retailer’s net profit plunged by 84 per cent year-on-year to HK$14 million, while total revenue fell by 12.9 per cent year-on-year to HK$1.15 billion.