Hong Kong-based restaurant chain Cafe de Coral Holdings Limited (Cafe de Coral) has registered a total profit decline during the fiscal year ended March 2016 of 11.7 per cent to US$66.7 million (MOP533 million), according to the group’s filing with the Hong Kong Stock Exchange. On the other hand, the group’s revenue registered growth of 2.9 per cent to US$975 million. The group stated it faced a ‘challenging year’ especially due to the ‘weakening economy and market conditions’ with the market in Mainland China decreasing due to ‘market conditions’, the release announced. The profit decrease come after fiscal year ended March 2015 Cafe de Coral profit increased 1 per cent to US$75.6 million; however, the group stated its ‘quick service restaurants and institutional catering businesses’ continue to operate well. Hong Kong is still the group’s main market, comprising 85 per cent of total revenue, and increasing 5 per cent to US$831 million in the finishing fiscal year. On the other hand, Cafe de Coral Mainland China operations, supporting 110 outlets, has experienced slower growth, with revenue decreasing 5 per cent in Southern China, with no total revenue in that region revealed by the group’s statement. Due to the downturn the group has closed several underperforming outlets in Southern China – namely, The Spaghetti House, according to the release. In the filing, Cafe de Coral chairman Sunny Lo Hoi Kwong said consumer sentiment in Hong Kong has been ‘softening’ but that the ‘downward trend in rental costs’ would open doors to the group’s expansion. Mainland China was considered by the chairman as ‘challenging’ but still the ‘growth engine’ of the group. The filing also said the group was ‘committed to maintaining a strong presence in Southern China’ and that it would resume its pace of expansion when ‘the economy begins to recover.’
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