- Management has undertaken a comprehensive reassessment of the original Transformation Plan, and new strategic priorities have been established moving forward

- Short term goal is to stabilize the business by reducing costs, normalizing inventory levels and overhauling core operations

- Positive initial results in the second half of FY12/13, particularly the narrowing of turnover decline, reduction in operating costs and decline in cash consumption rate

-Meanwhile, good progress also made in implementing faster and more efficient product related processes to regain competitiveness in the medium term

- Turnover of HK$25,902 million, down 11.5% in local currency terms as compared to last year, mainly due to a decline in business performance as well as the strategic decision to divest North American operations and the closure of certain loss-making stores as announced in prior financial years. Excluding the impact from the divestment of the North American operations and the closure of loss-making stores as announced in prior financial years, adjusted turnover was HK$25,523 million, representing a decline of 7.7% year-on-year in local currency terms

- EBIT Loss for the year of HK$4,170 million mainly due to provisions and impairments as previously disclosed in the Profit Warning announcement in May 2013, majority of which are non-cash and non-recurring items. Excluding the impact from the divestment of the North American operations, the closure of loss-making stores as announced in prior financial years, and the impact from the Exceptional Items, adjusted EBIT Loss was HK$(534 million) for the year.

The Group has comprehensively reassessed the original transformation plan and realigned its strategic and business priorities.

Realignment of Strategic Priorities

Strategic measures have been put in place to (i) stabilize the business by decisively reducing costs, normalizing inventory levels and stabilizing the operations in the short term; (ii) reignite growth by installing a “high performance product engine” in the medium term; and (iii) develop a platform for future growth in the long term which includes, among other initiatives, further development of our business in China and expanding the edc brand.

Management is encouraged to see the initial results from the short term actions, the most noteworthy being a significant reduction of the Group’s cash consumption, as evidenced by the considerable slowdown in cash consumption of only HK$42 million, net of dividend payment of HK$281 million, in the second half of FY12/13, as compared with cash consumption of HK$1,552 million in the first half of the financial year.