Chow Tai Fook Jewellery Group has reported a 17% year-on-year drop in revenue and a 25.7% drop in net profits for the financial year ended March 31, 2015, with the fall being attributed to the exceptionally high base effect as a result of the gold rush in FY2014 and a weak consumer sentiment, especially in Hong Kong and Macau market, during the second half of FY2015.

During FY2015, the Group recorded a revenue of HK$64,277.0 million (FY2014: HK$77,407.1 million); gross profit of HK$19,072.4 million (FY2014: HK$21,152.3 million), a decrease of 9.8% and net profit of HK$5,535.8 million (FY2014: HK$7,449.2 million). While gross profit margin was 29.7% (an increase of 240 basis points over FY2014’s 27.3%), net profit margin was 8.6% (FY2014: 9.6%).

The rise in gross profit margin was due to gradual normalisation of demand for gold products, and a greater share for gem-set jewellery which enjoys a higher margin.

The Jewellery business in Mainland China contributed 55.9% to the Group’s revenue, while the jewellery and watch business in Hong Kong, Macau and other markets contributed 41.1%. The remaining 3.0% was contributed by the watch business in Mainland China.

During FY2015, the Group saw a net increase of 180 POS, including one in Jeju Island, South Korea, a new market. E-commerce recorded a 29.3% y-o-y growth in Retail Sales Value.

Speaking of the Group’s annual results, Chairman Dr. Henry Cheng said, “In spite of the headwind in FY2015, continuous urbanisation and a growing middle-class have us convinced that growth opportunities still abound in Mainland China, and the Group will continue to focus on Greater China while maintaining our leadership position throughout the region.”