SU Group Holdings Reports 11% Revenue Growth For Fiscal Year 2024
Rhea-AI Summary
SU Group Holdings (NASDAQ: SUGP) reported strong financial results for fiscal year 2024, with revenue increasing 11.3% to HK$182.2 million (US$23.4 million) and net income growing 8.7% to HK$10.7 million (US$1.4 million). The security-related engineering services segment saw a 9.0% revenue increase to HK$107.0 million.
However, gross profit decreased slightly by 0.9% to HK$47.6 million, with gross profit margin declining to 26.1% from 29.3% in FY2023. The company's balance sheet showed improvements with trade receivables decreasing 37.5% to HK$21.9 million and cash and cash equivalents reaching HK$52.3 million. Working capital stood at approximately HK$82.1 million as of September 30, 2024.
Positive
- Revenue growth of 11.3% YoY to HK$182.2M
- Net income increase of 8.7% YoY to HK$10.7M
- Security engineering services revenue up 9.0% to HK$107.0M
- 37.5% reduction in trade receivables indicating improved collections
- Strong cash position with HK$52.3M in cash and equivalents
Negative
- Gross profit declined 0.9% YoY to HK$47.6M
- Gross profit margin decreased to 26.1% from 29.3%
- Increased cost of revenues by 16.4%
- Equipment leasing profit margin dropped to 64.6% from 73.9%
- Rising labor costs impacting security guarding services margins
News Market Reaction
On the day this news was published, SUGP declined 7.94%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
8.7% Increase in Net Income Year over Year- Strengthened Balance Sheet to Support Growth Initiatives
Select Financial Highlights:
- For the fiscal year ended September 30, 2024, SU Group reported an
11.3% increase in revenue on a year over year basis, led by growth in the security-related engineering services business, which increased9.0% on a year over year basis. - Net income increased by
8.7% on a year over year basis to HK$10.7 million (US ) for the fiscal year ended September 30, 2024, with net income per share (basic and diluted) increasing to$1.4 million HK from$0.82 HK on a year over year basis.$0.81
SU Group's Chairman and CEO, Dave Chan, commented, "We are driving consistent revenue growth and business expansion as we build on our strong competitive position. Our successful initial public offering on the Nasdaq market helped fortify our balance sheet and is allowing us to accelerate strategic investments that will ensure our long-term success, including hiring additional security experts and investing in advanced security technologies like our proven AI-aided security solutions. Our specialized focus and ability to closely support customers can be seen in several landmark wins we have announced, including our support of one
SU Group's Chief Financial Officer, Calvin Kong, noted, "We drove a near
SU Group Holdings Limited (Nasdaq: SUGP) provides security-related engineering services and security guarding and screening services:
- Security-related engineering services: The Company offers security-related engineering services to customers, including providing (i) security systems and products, provision of installation, and related maintenance services; (ii) security systems and products only; or (iii) maintenance services only. In addition, SU Group provides equipment rental services to its customers with use of dedicated security-related systems and equipment for contractual periods.
- Security guarding and screening services: The Company provides security guarding services, by dispatching security guards with corresponding abilities and qualifications on demand, to fulfill the customers' needs such as securing and guarding physical properties by, among other things, conducting patrols, entrance guarding, access control and alarm monitoring and response such as fire and gas detection, burglary detection and emergency management such as first aid service and communication and evacuation. SU Group also offers security guarding services targeted at crowd coordination and management, and provides security screening services, where its certified screeners work to detect of explosives, incendiary devices in air cargo consignment and dangerous goods for safety purpose through the operation of threat detection systems. In addition, the Company provides a variety of related vocational training courses.
Financial Results for the Fiscal Year Ended September 30, 2024
Revenues increased by
Cost of revenues increased by
Gross profit decreased slightly by
Gross profit margin was
Selling, general and administrative expenses decreased by
Losses on the disposal of property and equipment were
Our other income decreased by
Income tax expenses decreased by
Net income increased by
Trade receivables, net decreased by
Trade payables decreased by
Inventories increased by
Capital expenditures were
For the fiscal year ended September 30, 2024, net cash provided by operating activities was
The Company had a balance of cash and cash equivalents of
About SU Group Holdings Limited
SU Group (Nasdaq: SUGP) is an integrated security-related services company that primarily provides security-related engineering services, security guarding and screening services, and related vocational training services in Hong Kong. Through its subsidiaries, SU Group has been providing turnkey services to the existing infrastructure or planned development of its customers through the design, supply, installation, and maintenance of security systems for over two decades. The security systems that SU Group provides services include threat detection systems, traffic and pedestrian control systems, and extra-low voltage systems in private and public sectors, including commercial properties, public facilities, and residential properties in
Forward-Looking Statements
Certain statements in this press release are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "we believe," "we intend," "may," "should," "will," "could" and similar expressions. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's ability to renew contracts with recurring customers; the Company's ability to secure new contracts; the Company's ability to accurately estimate risks and costs and perform contracts based on the Company's estimates; the Company's relationship with the Company's suppliers and ability to manage quality issues of the systems; the Company's ability to obtain or renew the Company's registrations, licenses, and certificates; the Company's ability to manage the Company's subcontractors; the labor costs and the general condition of the labor market; the Company's ability to compete effectively; the Company's ability to successfully manage the Company's capacity expansion and allocation in response to changing industry and market conditions; implementation of the Company's expansion plans and the Company's ability to obtain capital resources for planned growth; the Company's ability to acquire sufficient products and obtain equipment and services from the Company's suppliers in suitable quantity and quality; the Company's dependence on key personnel; the Company's ability to expand into new businesses, industries, or internationally and to undertake mergers, acquisitions, investments, or divestments; changes in technology and competing products; general economic and political conditions, including those related to the security-related engineering services industry; possible disruptions in commercial activities caused by events such as natural disasters, terrorist activities, political, economic, and social instability, and fluctuations in foreign currency exchange rates, and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission (the "SEC"), including the Company's most recently filed Annual Report on Form 20-F and its subsequent filings. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC.
(Financial Tables Follow)
SU GROUP HOLDINGS LIMITED | ||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||
For the Years Ended September 30, | ||||||||||||||
2023 | 2024 | 2024 | ||||||||||||
HK$ | HK$ | US$ | ||||||||||||
Revenues | 163,690,966 | 182,164,539 | 23,434,647 | |||||||||||
Cost of revenues | (115,648,013) | (134,568,099) | (17,311,579) | |||||||||||
Gross profit | 48,042,953 | 47,596,440 | 6,123,068 | |||||||||||
Operating expenses | ||||||||||||||
Selling, general and administrative expenses | (36,805,428) | (36,028,548) | (4,634,910) | |||||||||||
Losses on disposal of property and equipment | (485,957) | (636,289) | (81,856) | |||||||||||
Income from operations | 10,751,568 | 10,931,603 | 1,406,302 | |||||||||||
Other income (expenses) | ||||||||||||||
Other income | 1,445,506 | 1,219,376 | 156,867 | |||||||||||
Finance expenses | (55,080) | (189,749) | (24,410) | |||||||||||
Other expenses | — | — | — | |||||||||||
Total other income, net | 1,390,426 | 1,029,627 | 132,457 | |||||||||||
Income before income tax expenses | 12,141,994 | 11,961,230 | 1,538,759 | |||||||||||
Income tax expenses | (2,338,850) | (1,307,742) | (168,235) | |||||||||||
Net income | 9,803,144 | 10,653,488 | 1,370,524 | |||||||||||
Less: Net income attributable to non-controlling interests | (105,775) | — | — | |||||||||||
Net income attributable to SU Group Holdings Limited's ordinary shareholders | 9,697,369 | 10,653,488 | 1,370,524 | |||||||||||
Net income per share | ||||||||||||||
Basic and diluted | 0.81 | 0.82 | 0.11 | |||||||||||
Weighted average number of shares | ||||||||||||||
Basic and diluted | 12,000,000 | 13,027,752 | 13,027,752 | |||||||||||
SU GROUP HOLDINGS LIMITED | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
As of September 30, | ||||||||||||
2023 | 2024 | 2024 | ||||||||||
HK$ | HK$ | US$ | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 16,400,123 | 52,338,132 | 6,733,065 | |||||||||
Trade receivables, net | 34,978,153 | 21,851,480 | 2,811,094 | |||||||||
Inventories | 40,919,214 | 47,613,381 | 6,125,247 | |||||||||
Prepaid expenses and other current assets | 1,590,259 | 5,013,876 | 645,011 | |||||||||
Contract assets, net | 3,187,403 | 6,443,947 | 828,985 | |||||||||
Prepaid income tax | — | 2,066,219 | 265,810 | |||||||||
Total current assets | 97,075,152 | 135,327,035 | 17,409,212 | |||||||||
Non-current assets | ||||||||||||
Property and equipment, net | 8,405,563 | 8,886,235 | 1,143,174 | |||||||||
Intangible assets, net | 144,879 | 268,500 | 34,541 | |||||||||
Goodwill | 1,271,160 | 1,271,160 | 163,529 | |||||||||
Prepaid expenses and other non-current assets | — | 4,462,823 | 574,122 | |||||||||
Deferred offering expenses | 3,853,500 | — | — | |||||||||
Operating lease right-of-use assets, net | 1,113,926 | 5,496,985 | 707,162 | |||||||||
Investment in key management insurance policy | 1,157,520 | 1,157,520 | 148,910 | |||||||||
Deferred tax assets | 1,418,419 | 207,702 | 26,720 | |||||||||
Total non-current assets | 17,364,967 | 21,750,925 | 2,798,158 | |||||||||
TOTAL ASSETS | 114,440,119 | 157,077,960 | 20,207,370 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Trade payables | 16,104,581 | 8,625,685 | 1,109,655 | |||||||||
Notes payables | 3,503,768 | 2,355,023 | 302,963 | |||||||||
Other payables | 2,633,447 | 3,499,507 | 450,196 | |||||||||
Accrued payroll and welfare | 8,228,964 | 9,040,942 | 1,163,076 | |||||||||
Operating lease liabilities – current | 204,156 | 1,935,187 | 248,953 | |||||||||
Income tax payable | 1,058,040 | — | — | |||||||||
Contract liabilities | 22,748,443 | 27,801,257 | 3,576,506 | |||||||||
Total current liabilities | 54,481,399 | 53,257,601 | 6,851,349 | |||||||||
Non-current liabilities | ||||||||||||
Operating lease liabilities – non-current | 61,229 | 3,004,974 | 386,576 | |||||||||
Other payables – non-current | 996,069 | 1,340,016 | 172,387 | |||||||||
Deferred tax liabilities | 1,468,575 | 431,717 | 55,538 | |||||||||
Other liabilities | 1,008,306 | 1,321,956 | 170,064 | |||||||||
Total non-current liabilities | 3,534,179 | 6,098,663 | 784,565 | |||||||||
Total liabilities | 58,015,578 | 59,356,264 | 7,635,914 | |||||||||
Commitments and contingencies | ||||||||||||
Shareholders' Equity | ||||||||||||
Ordinary shares (par value of | 120,000 | 136,475 | 17,557 | |||||||||
Shares subscription receivables | (119,990) | (90) | (12) | |||||||||
Additional paid-in capital | 14,642,029 | 46,260,499 | 5,951,205 | |||||||||
Retained earnings | 41,782,502 | 51,324,812 | 6,602,706 | |||||||||
Total SU Group Holdings Limited shareholders' equity and total shareholders' equity | 56,424,541 | 97,721,696 | 12,571,456 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 114,440,119 | 157,077,960 | 20,207,370 | |||||||||
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SOURCE SU Group Holdings Limited
FAQ
What was SUGP's revenue growth in fiscal year 2024?
How much did SUGP's net income increase in FY 2024?
What caused the decline in SUGP's gross profit margin for FY 2024?
How much cash does SUGP have as of September 30, 2024?
