- Prachi Singh |
The board of directors of Esprit Holdings Limited has issued a statement saying, based on its preliminary review of the unaudited consolidated management accounts of the group for the eleven months ended May 31, 2018, it expects to record a loss of around 2.17 billion Hong Kong dollars (276 million dollars) to 2.27 billion Hong Kong dollars (289 million dollars) for the full financial year ending June 30, 2018. A larger than expected operating loss between 900 million Hong Kong dollars (115 million dollars) and 950 million Hong Kong dollars (121 million dollars) is expected as a result of decline in revenue due to less customers traffic.
The company said, this anticipated LBIT is mainly attributable to certain non-recurring provisions and impairments and an expected operating loss of the underlying operations. As reported in the interim results for the six months ended December 31, 2017, due to the significant decline of the company’s China business in recent years, there was a full impairment of the remaining balance of the goodwill and customer relationships in association with the China operations of 794 million Hong Kong dollars (101 million dollars) before taxation.
Also as announced on May 3, 2018, the group intends to divest the loss-making operations in Australia and New Zealand, which will result in one-off costs in the range of 180 million Hong Kong dollars (23 million dollars) to 200 million Hong Kong dollars (25 million dollars). The annual loss is also expected due to additional provisions and impairments due on the back of weaker than expected sales performance of directly managed retail stores for the financial year, provisions for store closures and onerous leases, impairment of fixed assets of directly managed retail stores.
Picture:Esprit press room