Good afternoon, ladies and gentlemen. Welcome to Sa Sa Year 2014/2015 Annual Results Investor Presentation. Before the presentation, let me introduce you the company representative on stage, Dr. Simon Kwok, SBS , JP, the Chairman and CEO.
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Dr. Guy Look, CFO and Executive Director.
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The agenda today will begin with Dr. Kwok going through the annual results highlights, followed by Dr. Look walking us through the financial performance, business review, as well as the outlook and the way forward in details. There will be a Q&A forum afterward. Now let me hand over to Dr. Kwok. Dr. Kwok, please. [Non-English content]
Good afternoon, ladies and gentlemen. Welcome to Sa Sa's annual results investors presentation for the year ended 31st March 2015. In the past year, Sa Sa has faced a number of challenges, especially in the second half of the year. The retail industry was affected by a number of events and market circumstances, leading to a slowdown in the group's full-year turnover growth, which grew by only 2.7% to HKD 8,993,000,000. Correspondingly, profit also dropped by 10.3% to HKD 839 million. The group added seven new stores to our retail network, bringing the total number of stores to 287 as at the end of the financial year. In recent years, sales from our Hong Kong and Macau markets have always benefited from a continuous increase in mainland Chinese tourist arrivals.
Despite the weakened spending power of mainland tourists, we still maintained growth in sales during the first half of the financial year. However, in the second half of the financial year, negative growth in mainland Chinese tourist arrivals was recorded, and several social movements damaged Hong Kong's retail and tourism industry. As a result, sales growth in the third quarter went into negative territory, which dragged down the annual results. Overall, the group's retail market is now facing unprecedentedly keen competition. The challenge is posed not only by traditional retailers, it also comes from changes in online shopping patterns in China. These changes have marked a new era and come as a serious blow to the local retail industry. Under the circumstances, we are taking proactive measures and have successfully enhanced our price competitiveness through intensive marketing and promotional activities.
We have also strengthened the services provided for customers in order to boost sales. Hence, we have maintained growth in the number of transactions recorded. This positive aspect has proven that Sa Sa is still a very popular brand among both locals and mainland tourists. Furthermore, we have taken a more prudent approach to the opening of new stores. Through the restructuring of our retail network, we have increased the number of customers at our stores and enhanced both our cost efficiency and operational efficiency. In mainland China, we successfully enhanced our profitability through launching boutique stores, which are part of our retail network restructuring. This initiative effectively minimized our overall operating loss. In order to promote our business in overseas markets, last year, the group strengthened our management team and increased other resources to support the long-term development of these markets.
We are confident that the changes in the management team will only have a temporary impact on the group's business overseas. As for our online business, we already shifted the focus of sasa.com to the mainland market last year, where online shopping is so dramatically on the rise. The measure has boosted our sales there. We believe that the second half of this calendar year will continue to be full of challenges. The uncertainties in Hong Kong's political environment and increasingly intense competition from both traditional and online sources will add pressure to an already slowing market. Nevertheless, the group remains cautiously optimistic about the prospects for retail sales growth in Hong Kong. The group has always strived to enhance service standards in order to bring variety and quality to our customers' shopping experience.
Looking ahead, we will focus on increasing sales growth by actively developing the new and more convenient O2O business. This initiative and our cross-border e-commerce business platform are important milestones in the group's development. Our goal in the long run is to provide a more comprehensive shopping experience for customers. We aim to reach out to cross-border customers to expand our customer base. This will boost the turnover and profit contribution, both from our online business and from existing markets outside Hong Kong. To capitalize on the growing popularity of Korean cosmetic products, we will enrich the product mix of Korean products in all product. At the same time, we will continue to enhance the market position of our new house brands and strengthen relevant marketing efforts with the aim of further improving the profit margins of the group.
Overall, we will strive to enhance our competitive strengths and maintain solid growth and generate satisfactory returns for our shareholders. I am now going to pass the floor to Guy, who will explain in detail Sa Sa's financial and operational performance for the fiscal year of 2014 to 2015. Thank you.
Ladies and gentlemen, welcome to Sa Sa International Holdings Limited's annual results presentation for investors for the year ended March 31st, 2015. Our agenda today covers group financial performance, business review by markets, and outlook and the way forward. First of all, our financial performance. Our group turnover increased by 2.7% to HKD 8,992.8 million. Profit for the year decreased by 10.3% to HKD 838.8 million, and earnings per share decreased by 10.6% to HKD 0.295. Our gross profit margin decreased by 1.6% to 44.9%, and net profit margin by 1.4% to 9.3%. We are proposing a final dividend per share of HKD 0.09 and a special final dividend per share of HKD 0.055. Which together with HKD 0.09 already paid for the interim, would make a total annual dividend per share of HKD 0.235, representing a payout ratio of 80%.
Of the group's turnover, Hong Kong and Macau contributed HKD 7,356.7 million representing 81.8% of group turnover. Mainland China contributed 3.9%, Singapore 2.7%, Malaysia 3.8%, Taiwan 3.2%, and our online business, sasa.com, 4.6%. It is our objective to increase the sales mix of our online business and of the markets outside of Hong Kong, and we are devoting more resources and expertise to this end. We believe that by improving our product offerings and by building on our network in such markets, we will be able to make this happen. We will discuss more in later slides. We are in a sound financial position. Our net cash and bank balance increased by HKD 254.4 million from last year to HKD 1,163.7 million This is because of improvements in net working capital, a reduction in CapEx, more cash generated from operating activities, and retention of profits.
In the case of CapEx, it has been reduced by HKD 117.9 million to HKD 149.9 million. This is mainly because of a particularly high CapEx last year, amounting to HKD 95 million for the acquisition of an entire floor for our office use, which of course has not been repeated for this year. In addition, we have had some savings on store openings and store renovation this year in the Hong Kong market. We move on to business review by market. For the Hong Kong market, retail sales growth increased by 3.2%, and on a same store basis by 2.2%. The number of transactions increased by 6.8%, and average sales per transaction decreased by 3.3%. Sales were significantly weaker in the second half, when local consumption was badly affected by local social environment in the third quarter, while tour spending dropped in the fourth quarter due to protests.
The ticket size held up for locals throughout the year. As for mainland shoppers, the ticket size decreased throughout the year. The strength of the U.S. dollar and Hong Kong dollar has made shopping in overseas markets for both locals and for mainland Chinese more attractive, and that has also affected us here in Hong Kong. In terms of ticket size, in Hong Kong and Macau market, we aim to be the driver of a lower ticket size. We recognize that lower ticket size actually reflects changes in consumption behavior. The faster decline in ticket size in the second half was due more to our own drive to focus more on lower priced products to draw traffic. We believe that the future sales growth will be driven more by traffic and also quantity sold.
Of course, you can see from the graph that despite all these, the growth in number of transactions for us has exceeded the growth in terms of the number of tourist arrival in Hong Kong. In the China market, sales declined by 4.6% to HKD 276.7 million. In terms of losses, the losses decreased from last year's HKD 53.7 million to the current year's HKD 24.5 million. During this year, we focused on boutique stores rollout. Sales declined due to product weaknesses. We had insufficient new product offerings, and also we had some issues on importation for our own label products. However, the boutique stores increased their contribution, allowing us to narrow our operating losses. In the other markets, Singapore sales declined by 2.6%. Malaysia sales grew by 6.2%. Taiwan sales growth was 3.8%.
The weak performance was due to changes in management in the regional and local office, the missing Malaysian aircraft affecting both Singapore and Malaysia markets, and weak product offering. As for e-commerce, we grew by 5.6% for the year. We did put more focus on the China market, which for us grew by 39%. We put more weighting on flash and link sales, and we have been enhancing our marketing capability and optimizing our channel advertisements. We have also localized payment gateways. We are enhancing our brand awareness, and in the case of Weibo, our fan base grew from 1.4 million- 2.1 million in the last 12 months. Our profitability has been affected by increased investments and A&P expenses. In the area of brand management, our house brand product mix declined from 44.2%- 43.3%. We have been affected by a sea change in consumption pattern.
During the year, the average selling price of house brand products sold decreased by 12.1%, but we did sell more. The quantity of house brand products sold increased by 14.3%. We have increased our focus on locally sourced products and parallel imported products, which are faster to markets. The personnel changes of own-label team affected the timeliness of our response to a fast-changing market. The changes resulted in weaker gross profit percentage and sales growth. We move on to outlook and the way forward. In the Hong Kong and Macau market, we face various challenges. There is moderating growth in mainland tourist arrivals and weaker spending. There is a sea change in mainland shoppers' consumption preferences. The anti-graft measure in the PRC curtails demand towards high-price items. New Shenzhen residents multiple-entry visa limits visits to once a week.
The strength of the U.S. and Hong Kong dollar drives local consumers and mainland tourists to shop in markets with weaker currencies. There is intensifying competition within the cosmetic industry, including price competition. The political situation in Hong Kong and the anti-mainland tour sentiment is also a challenge. Given these challenges, we are engaging a number of strategies for Hong Kong and Macau markets. In terms of store portfolio, we will rationalize our stores in tourist locations, build stores in residential locations, and modify the size of specific stores to enhance productivity and profitability. Our change in the boutique size format in China has proven that a smaller store format is indeed good for profitability. That will be put into practice in Hong Kong in some cases. We will try trendy boutique store format to attract new brands and customers to cater to new demand.
We will commence our O2O business model and digitize personal service of our beauty consultants to enable cross-border sales to mainland customers after they return to the mainland. Other initiatives to cope with new market circumstances would include introducing more good value products to cater for the change of customer needs, strengthening the portfolio of Korean products and their visual merchandising, attracting and building local customer base. As for the mainland China market, our boutique store format is bearing fruit. We would improve our management structure and systems, improve our operating efficiency and execution, and improve our product offerings and optimize our commission scheme. As for Singapore, Malaysia, and Taiwan markets, we already have a new Senior VP in place to drive overall strategic development and execution.
Strategies will include building management resources, competence, and team-building, enhancing product portfolio by introducing new brands and products, improving visual merchandising, and intensifying our training programs with better incentive programs and closer store management monitoring. We would have various cost initiatives to reduce renovation cost and inventory carrying costs. As for e-commerce, challenges would include cross-border and online, offline competition, and intensifying product and price competition from other shopping websites and mobile apps. Initiatives would include commencing an O2O operation and improving our cross-border fulfillment, launching a new mobile app, synchronizing our platforms to cater for consumers' cross-platform behavior, and quick new product launches to adapt to faster-changing market trends. We would adopt new marketing channels and optimize our old, and build partnerships and alliances. We would use the cross-border O2O initiative to drive future growth.
This involves the usage of digitizing the personalized service of our beauty consultants to drive sales and enhance our online gross profit percentage. What it involves is that there will be the usage of our WeChat account by the beauty consultants in our stores to send standardized content to their customers through the moments. For online or offline purchases, for products bought in our stores or for collection after purchasing online, the beauty consultants will receive commission. To put into perspective, in Hong Kong and Macau, we have approximately 1,200 beauty consultants with good service and generating over HKD 7 billion worth of revenue. When they're put to use on the digital front, we hope that they'll be able to help us make it happen. The advantages are many. First of all, we would have a more comprehensive offline and online shopping experience for customers.
The contents delivered would be standardized by the company, and we would have a centralized customer base for customer retention. This can be replicated to other markets. In the area of category management and product development strategies, we will have a new dedicated team to source new and trendy products. We will have fast new product launches and reorder processes to adapt to fast-changing market trends. This would be supported by business and commercial intelligence. The storyline and marketing improvements will be made for our own label, and we would build strategic relationships with major beauty brands. Our store network strategy would vary between markets. In the Hong Kong and Macau market, and Malaysia and Taiwan markets, we would be in an expansion mode to increase penetration. There'd be some degree of optimization for the Hong Kong markets.
As for the mainland China and Singapore markets, they'll be in an optimization mode to enhance store contribution. That's the end of the presentation. Thank you for your attention.