Café de Coral (341) investor relations material

Executive summary

• Revenue for the first half of FY2025/26 declined 5.4% year-over-year to HK$4,036.2 million, with adjusted EBITDA down 29.4% to HK$242.9 million and profit attributable to shareholders dropping 67.6% to HK$46.7 million, mainly due to weak consumer sentiment and fierce price competition in both Hong Kong and the Chinese Mainland.

• The Group faced significant challenges from structural market changes, including normalization of outbound spending, weak inbound tourism, and high volatility in sales volumes, particularly during peak periods.

• Casual Dining and Institutional Catering divisions showed resilience, benefitting from simple operations and stable demand, while the Chinese Mainland business maintained steady network expansion and loyalty membership growth despite a challenging environment.

• Management is focused on efficiency improvements, new business formats, menu simplification, consolidation of underperforming outlets, and supply chain integration to improve margins.

• An interim dividend of HK10 cents per share was declared, with a payout ratio of 124.1% for the period.

Financial highlights

• Revenue: HK$4,036.2 million, down 5.4% year-over-year.

• Adjusted EBITDA: HK$242.9 million, down 29.4% year-over-year.

• Profit attributable to shareholders: HK$46.7 million, down 67.6% year-over-year; excluding fair value loss on investment properties, profit declined 59.4%.

• Gross profit margin fell to 8.2% from 10.3% a year earlier.

• Basic EPS: HK8.2 cents, down 67.3% year-over-year.

• Interim dividend: HK10 cents per share (2024: HK15 cents), payout ratio 124.1%.

Outlook and guidance

• The Group expects continued volatility in the global and regional economy and is committed to business transformation, focusing on new formats, prudent expansion, and leveraging its market position in Institutional Catering.

• Plans include rationalizing and optimizing store networks, accelerating digitalization and automation, and enhancing supply chain integration to drive cost efficiency.

• The Group aims to enhance ROI, protect margins, and expand its high-quality store network, especially in the Greater Bay Area.

• The Group remains confident in its ability to adapt and deliver long-term value, building on its brand legacy and financial strength.