City Chain parent warns of loss

City Chain parent Stelux Holdings has warned shareholders of a worsening loss for the latest half year.

Stelux, which also owns the Optical 88 and Egg eyewear chains, says that current information shows the loss for the six months ended September 30 will exceed that of the same period last year.

But the result appears to be impacted by extraordinary events rather than poor trading in its store network, which spans greater China and Southeast Asia.

The loss is mainly because of non-cash impact including a one-off gain from the redemption of convertible bonds of HK$75.9 million (US$9.7 million), the amortisation of a share-based payment of convertible bonds of $9.3 million, and an increase in the liability component of convertible bonds of $41.2 million.

Last July, in advance of the release of final first-quarter data, Stelux reported a year-on-year sales decline of 9.5 per cent (reduced to 8.4 per cent on a foreign-exchange neutral basis) to HK$624.7 million for the June quarter. However, it pointed out that was an improvement on the 16.2 per cent decline for the full financial year to March 31.

Chairman/CEO Joseph Wong says this has not been reviewed or audited by the company’s
auditors and is based on the board’s preliminary review of the unaudited consolidated management accounts of the group.

The group’s results for the half-year may vary, and the interim results will be published next month.