HONG KONG SAR -
Media OutReach Newswire - 28 June 2024 -
HONMA Golf Limited ("HONMA"; together with its subsidiaries, the
"Group"; HKEX stock code: 6858), one of the most prestigious golf brands
worldwide, announces its consolidated annual results for the year ended
31 March 2024 (the "Period").
Financial Highlights
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- Due to negative impact from global economic uncertainty and retail
sentiments, the Group's revenue decreased by 11.1% to JPY26,222.9
million (equivalent to USD182.6 million).
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- Notwithstanding this, the Group's gross profit margin expanded by
0.4 percentage points during the same period to 51.2%, thanks to its
unique brand and price positioning as well as continued channel
optimization.
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- Similarly, the Group's EBITDA rose robustly by 22.0% as compared to
the same period last year and reached JPY 7,285 million (equivalent USD
50.7 million). Net profit increased by 48.3% and net profit margin
improved by 7.4 percentage points.
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- Net operating cash flow remained positive, standing at JPY5,416.1
million (equivalent USD 37.7 million) for the year ended 31 March 2024.
The Group's net operating cash flow grew by a CAGR of 18.7% over the
past six years.
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- A final dividend of JPY1.5 per share was declared, which together
with the interim dividend of JPY1.5 per share led to a total dividend
for the year of JPY3.0 per share. Total dividend payout will amount to
JPY1,816.9 million, representing 37.6% of the Group's distributable
profits for the period.
Major Achievements
For the year ended 31 March 2024, HONMA continued executing its growth
strategy of "single brand, multi-categories and Asia-focused" while
carefully protecting its financial strength and cash flow. Despite sales
performance, HONMA delivered rock solid profitability improvements by
continuously implementing operational efficiency improvement initiatives
while re-strategizing its distribution footprints in Asia. As a result,
HONMA continued to experience positive sales growth in its
direct-to-consumer channels and hero product categories during the
Period. Furthermore, the Group also recorded net profit growth, improved
net profit margin and operating cash flow, demonstrating the Group's
exceptional management capabilities and business resilience in a
volatile economic environment.
Improving Profitable Growth by Focusing on High-Margin Self-Operated Channels
Revenue from self-operated stores increased by 7.2% from JPY10,217.0
million for the year ended 31 March 2023 to JPY10,952.2 million for the
year ended 31 March 2024; and gross profit margin sharply went up by
7.0pp to reach 56.8%. Such increase was mainly due to robust retail
sales performance in Japan and mainland China, with year-on-year retail
sales growth of 16.0% and 15.7% respectively.
HONMA operates the largest number of self-operated stores among major
golf companies. Self-operated stores provide consumers with a 360-degree
experience of the HONMA brand and its products. As at 31 March 2024,
the Group had 95 HONMA-branded self-operated stores, representing a net
increase of five stores during the Period, all of which were located in
Asia. The Group aims to continuously upgrade the design, visual display
and consumer experience of its self-operated stores to project one
consistent brand image and consumer experience.
At the same time, HONMA strategically redeployed its wholesale channels
by a better focus on the larger and more relevant retailers across all
of its markets. As a result, revenue from third-party retailers and
wholesalers decreased by 20.8% for the Period. As at the end of March
31, 2024, HONMA has substantially completed its channel optimization in
Europe and the US, but the process in the home markets (Japan, Korea and
China (including Hong Kong and Macau)) remains underway.
Visible Ecommerce Sales Growth with Revenue up 17.4% YOY across Public and Private Spheres
The creation of a robust and active digital ecosystem, from content to
sales conversion, from public to private sphere has been a key part of
HONMA's growth initiatives. During the last financial year, revenue from
e-commerce grew by 17.4%. The rapid expansion of digital communications
generated improvements in organic traffic, conversion and other digital
brand engagement matrixes such as bounce rate and time on site, among
others.
In addition, to boost customer loyalty, the Group revamped its customer
relationship management ("CRM") systems in China to cover all of its
sales and engagement touch points with elevated loyalty benefits. The
Group's CRM system upgrade led to a consistent rise in member
recruitments, with the total number of members in China rising 43.7%
YOY; while sales conversion rate and repurchase rate went up hand in
hand.
Customer events have always been key to the continued enhancement of
HONMA's brand and product awareness as well as consumer engagement.
During the Period, HONMA hosted 3,564 customer days across its home
markets, most of which were held on golf courses with dedicated fitters.
Although the total number of customer events slightly decreased, the
average participation per event and sales conversion rate improved.
Uniquely Positioned Products Targeting Super-Premium and Premium-Performance Consumers
HONMA applied several of its revolutionary proprietary technologies to
the design and development of its latest BERES and TOUR WORLD products,
designed for affluent and avid golfers.
Following the launch of BERES 09 and BeZEAL 3 in early 2024, revenue
from BERES golf clubs in Japan rose by 19.6%, while revenue from BeZEAL 3
rose by 6.0 times from the year ended 31 March 2023. This market
reception reconfirmed HONMA's strong brand equity, unique product
positioning in the industry and its deep understanding of its consumers.
Accelerating Growth in Apparel to Create an Exquisite Range of Products
Revenue from apparels increased by 4.9% YOY to JPY3,157.5 million for
the year ended 31 March 2024; gross profit margin of apparels increased
by 16.8 percentage points YOY to 43.5%. Despite weak consumer sentiments
in mainland China, apparels sales continued its growth trajectory and
achieved 23.2% YOY growth, with gross profit margin reaching 62.0%.
Re-defining the HONMA Brand and Creating a 360-degree Brand Experience
HONMA initiated various programs to improve its global brand positioning
and communication with target consumers. To re-define HONMA as a
dynamic, relevant and premium golf lifestyle brand among Internet-savvy
younger golfers, HONMA has constantly upgraded its global website and
social media platforms. Through regular visual and content updates to
all its digital platforms, HONMA continually promotes its brand and
product recognition, and its strategic content refreshes are designed to
appeal to the younger golfing demographic.
HONMA retained leading design and marketing agencies to renovate its
retail space so as to provide the ultimate brand experience and
customizable consumer journey in major markets. For the year ended 31
March 2024, HONMA opened 14 new stores in China, one in Japan and two
elsewhere in Asia, consistently applying the new retail visual identity,
design concept and consumer experience elements using advanced
technology. HONMA also upgraded multiple shop-in-shops in the US, Japan
and China using the same design concept so as to present the same
consumer space and experience in all markets.
Business Outlook
Moving forward, HONMA is committed to executing its long-term growth
strategy to build a world-leading golf lifestyle company leveraging on
HONMA's brand legacy, expanding distribution network, innovative
technologies, and traditional Japanese craftsmanship. HONMA will
sustainably improve and transform the HONMA brand value into customer
loyalty, continuously increase the Group's market share in home markets
by maintaining its leading position in the super-premium segment while
making solid inroads into the fast-growing premium-performance segment,
anchor sustainable growth in North America and Europe based on the
updated product and distribution strategy, nurture complementary
non-club product lines to provide customers with a complete golf
lifestyle experience and continue product innovation and development to
cater for the latest market trends.
Mr. LIU Jianguo, Chairman of the Board, President and Executive Director of HONMA Golf Limited,
said: "Our performance in FY2024 showcases our resilience and strategic
foresight in a challenging market environment. By focusing on
high-margin channels, product innovation, and digital transformation, we
have not only strengthened our financial position but also enhanced our
market presence. HONMA is committed to enhancing our market penetration
among key demographics in home markets. Additionally, we remain focused
on optimizing our distribution channels to ensure sustained
improvements in our operations. Looking ahead, we are committed to
leveraging our brand legacy and innovative capabilities to drive
sustainable growth and deliver exceptional value to our stakeholders."