Kidsland Announces 2019 Annual Results

HONG KONG, Mar 31, 2020 - (ACN Newswire) - Kidsland International Holdings Limited ("Kidsland" or the "Group"; stock code: 2122), the largest toy retailer and distributor in China, today announced its annual results for the year ended 31 December 2019 ("FY2019" or "the Year"). During the year, despite the challenging economic environment, the Group focused on executing its established strategies in enhancing brand and channel effectiveness, and operational efficiency and has made steady progress.

The Group managed to grow revenue by 3.6% to approximately RMB1,710.0 million, which is no mean feat against a multitude of macro-economic headwinds and the unexpected social unrest in Hong Kong in 2019. The Group's biggest channel, retail shops, continued to generate a healthy growth rate at 6.2% to approximately RMB656.6 million in 2019, by increasing store productivity. As part of its effort in reaching widened end-consumer base and reducing fixed costs, the wholesale channels revenue rose 13.7% to approximately RMB487.4 million, representing 28.5% of total revenue in 2019 (2018: 26.0%), primarily driven by strong growth in certain category-leading brands the Group carries. E-commerce revenue continued to rise by 11.4% to approximately RMB174.3 million, representing 10.2% of total revenue in 2019 (2018: 9.5%).

Total selling and distribution, and general and administrative expense decreased year-on-year by 5.2% to RMB739.0 million. Stripping off some extraordinary items , the Group's Adjusted EBITDA turned positive to RMB17.7 million (2018: loss of RMB3.8 million). Adjusted loss in 2019 was more than halved to RMB20.5 million from RMB47.5 million in 2018. Adjusted loss margin shrank to negative 1.2% in 2019 from negative 2.9% in 2018.

Since January 2020, the outbreak of the Coronavirus Disease 2019 ("COVID-19") has affected the business environment. In light of the impact brought by COVID-19 outbreak, certain landlords have offered rent concession to different extents, including rent-free periods or long-term rent reductions. The Group has also received support from suppliers in extending procurement payments and other forms of support, to cope with the challenging market together, while getting prepared for the market recovery. Various forms of government relief measures with respect to tax, social benefits and direct subsidies, in Mainland China and Hong Kong, are additional help in stabilizing and improving the Group's liquidity.

The Group would continue to upgrade its retail and omni-channel experience offered to customers and be more targeted and systematic in expanding its wholesale network. End-to-end digitalisation of the whole organisation and the customer journey, is also an increasingly important driving force in spearheading its transformation. All of these directions would be supported by its continuous prudent financial management, with a laser focus on cashflow, inventory and profitability management.

To best position itself for market recovery and enhancing brand awareness and presence, Kidsland also announced the adoption of a new corporate logo today. The new corporate logo aims to embrace the new generation of consumers, with widened age, gender and cultural appeal. It re-energies and modernises the Group's corporate image and is a cornerstone of its new brand platform, which embodies its new brand store image, curated product assortment and seamless omni-channel shopping experience. The Group is excited and looking forward to bringing such refreshed image and customer journey to consumers in the months to come, in both Mainland China and Hong Kong.

Mr. Lee Ching Yiu, Chairman and CEO of Kidsland, said, "Under the current challenging business environment, the Group will continue to be prudent and risk conscious in its business and cashflow management, on one hand. On the other hand, we would not stop improving and elevating our competitiveness, in order to capture any opportunities from a likely market rebound and the ongoing consumption upgrade and sophistication. Therefore, we announce today the adoption of our new corporate logo, which is the prelude to our upcoming transformation. With our extensive experience and insight gained throughout the years, we are confident to grow stronger out of the current storm."

About Kidsland International Holdings Limited ( stock code: 2122 )Kidsland International Holdings Limited ("Kidsland" or "the Group") is engaged in the retail, wholesale, e-commerce and brand operation of toys and infant products in China. As the largest toy retailer and distributor in China, Kidsland has close to 20 years of industry experience and carry a portfolio of world-renowned, category-leading brands. The Group owns the most comprehensive online and offline sales network in China. Currently, its self-operated offline retail system includes Kidsland and Babyland stores, LEGO Certified Stores, and the FAO Schwarz flagship store.

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