Global Engine Group Holding Limited Announces Financial Results for Fiscal Year 2024

HONG KONG, Nov. 01, 2024 (GLOBE NEWSWIRE) — Global Engine Group Holding Limited (the “Company” or “GLE”), a Hong Kong-headquartered integrated solutions provider in information communication technologies (“ICT”), today announced the financial results for the fiscal year ended June 30, 2024.

Key Fiscal Year 2024 Financial Metrics:

  • Revenue increased by HKD4.8 million, or 10.7%, to HKD49.5 million (US$6.3 million) for the year ended June 30, 2024 from HKD44.7 million for the year ended June 30, 2023.
  • Gross profit decreased slightly by 0.8% to HKD7.3 million (US$0.9 million) in 2024 from HKD7.4 million in 2023. Gross margin also declined by 1.7 percentage points year-on-year from 16.5% in 2023 to 14.8% in 2024.
  • Net income was HKD2.6 million (US$0.3 million) for the year ended June 30, 2024, decreased by 2.6% from HKD2.7 million in 2023.

Mr. Andrew Lee, CEO, Chairman and Director of the Company commented: “In fiscal year 2024, our Company achieved notable revenue growth, increasing by 10.7% to reach HKD49.5 million (US$6.3 million), up from HKD44.7 million in the previous year. This growth was largely fueled by our expanding cloud and data center managed services, particularly in Malaysia and Taiwan, where demand continues to rise. While we saw a decline in revenue from telecommunications and consultancy services – mainly due to the completion of specific projects in Hong Kong last year and that the Company targets to focus more on markets outside of Greater China such as Southeast Asia – we remain optimistic about our strategic focus on cloud solutions, which reflects our efforts to diversify our offerings and penetrate new markets.”

“Our cost of revenues increased to HKD42.1 million (US$5.4 million), primarily driven by higher subcontracting expenses linked to an uptick in project volume. As a result, gross profit slightly decreased by 0.8% to HKD7.3 million (US$0.9 million), resulting in a gross profit margin of 14.8%. This decline can be attributed to our competitive pricing strategies aimed at capturing market share.”

“Looking ahead, we are implementing several strategic initiatives to drive further growth and enhance our competitive edge. We plan to explore new markets across Southeast Asia, focusing on regions with rising demand for cloud and data center managed services. Investments in technology and innovation will be prioritized, enabling us to enhance service delivery through advanced data analytics, artificial intelligence, and automation.”

“To support our growth ambitions, we aim to strengthen partnerships with leading technology providers and local businesses, diversifying our service portfolio with tailored managed services and consulting offerings. Additionally, we will intensify our marketing efforts to enhance brand awareness and position ourselves as a leader in cloud solutions. Recognizing that our workforce is key to success, we will enhance talent development programs to attract and retain top talent. Through these initiatives, we are confident in our ability to drive sustainable growth and deliver substantial value to our stakeholders in the coming years.”

Financial Results for Fiscal 2024

Revenues

Revenue rose by HKD4.8 million, or 10.7% to HKD49.5 million (US$6.3 million) for the year ended June 30, 2024, up from HKD44.7 million in 2023.

The company provides cloud and data center managed services, including business planning, technical consulting, and managed services like remote network support and monitoring. The growth in these services was driven by increased revenue in Malaysia and Taiwan.

However, revenue from telecommunications, consultancy and related services declined due to the completion of specific projects in Hong Kong in the previous fiscal year, with no similar projects undertaken for the year ended June 30, 2024.

The following table presented the Company’s revenues disaggregated by service lines for the years ended June 30, 2024 and 2023:

 

  For the years ended June 30
In million HKD, except percentage change 2023   2024   Change   Change
Revenues HKD   HKD   HKD   %
Cloud services and data center managed services $23.6   $41.4     $17.8   75.5%
Telecommunication, consultancy and related services $21.1   $8.1     ($13.0)   (61.9)%
Total revenues $44.7   $49.5     $4.8   10.7%
                 

Cost of Revenues

Cost of revenues includes expenses for consultants, employee compensation, and other third-party costs related to revenue-generating activities. For the year ended June 30, 2024, cost of revenues totaled HKD42.1 million (US$5.4 million), up HKD4.8 million from HKD37.3 million in 2023, primarily due to increased subcontracting expenses from more projects.

Gross Profit

Consequently, gross profit for the year ended June 30, 2024, was HKD7.3 million (US$0.9 million), a slight decrease of 0.8% from HKD7.4 million in 2023. Gross profit margin fell to 14.8%, or down 1.7%, from 16.5% the previous fiscal year, attributed to our offering competitive pricing to enter new markets.

General and administrative expenses

General and administrative expenses consisted primarily of motor car expenses, IT expenses, depreciation, legal and professional fees, accounting fee, director’s fee, salaries and employee benefits and others.

General and administrative expenses rose by 5.5% from HKD4.2 million in fiscal year 2023 to HKD4.5 million (US$573,766) in fiscal year 2024. This increase was primarily due to increases in salaries and employee benefits from a larger workforce in fiscal 2024, partially offset by a HKD132,411 (US$16,958) decrease in legal and professional fees related to the company’s initial public offering in the U.S.

Net income

As a result of the above discussed, the Company recorded a net income of HKD2.6 million (US$332,403) for the year ended June 30, 2024, representing a decrease of HKD69,586, or 2.6%, from a net income of HKD2.7 million for the year ended June 30, 2023.

Recent development:

On September 23, 2024, the Company completed its initial public offering and raised gross proceeds of US$8 million before deducting underwiring discounts and other offering expenses.

On October 18, 2024, the Company closed the sale of an additional 300,000 ordinary shares, pursuant to the full exercise of the underwriter’s over-allotment option granted in connection with its initial public offering. As a result, it has raised gross proceeds of US$1.2 million, in addition to the previously announced IPO gross proceeds of US$8 million, for total gross proceeds of US$9.2 million raised in its initial public offering before deducting underwriting discounts and offering expenses.

About Global Engine Group Holding Limited
Global Engine Group Holding Limited is an integrated solutions provider that operates via a wholly-owned subsidiary incorporated in Hong Kong to deliver (i) ICT solution services which include the cloud platform deployment, IT system design and configuration, maintenance, data center colocation and cloud services; (ii) technical services which include the technical development, support, and outsourcing services for data center and cloud computing infrastructure, mobility and fixed network communications, as well as IoT projects; and (iii) project management services which enhances productivity and collaboration management and enables successful implementations and adoption of solutions for customers, to drive business outcomes and innovation for its customers. GLE’s target customer groups include: (i) small to medium-sized telecom operators and ICT service providers seeking expansion in Hong Kong and the South East Asian market; (ii) data center and cloud computing services providers; and (iii) Internet-of-things (“IoT”) solutions providers. For more information, please visit: www.globalengine.com.hkir.globalengine.com.hk/.

Forward-Looking Statement
This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will, “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These forward-looking statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and other factors discussed in the “Risk Factors” section of the registration statement filed with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:
Investor Relations
WFS Investor Relations Inc.
Janice Wang, Managing Partner
Email: [email protected]
Phone: +86 13811768599
+1 628 283 9214

GLOBAL ENGINE GROUP HOLDING LIMITED

CONSOLIDATED BALANCE SHEETS

    As of June 30,  
    2023     2024     2024  
    HKD     HKD     US$  
Assets                  
Current assets                  
Cash   $ 6,245,104     $ 8,406,293     $ 1,076,584  
Accounts receivable, net     8,716,167       17,130,587       2,193,894  
Prepayment and deposits     202,538       345,756       44,281  
Prepaid tax     722,140       168,199       21,541  
Total current assets     15,885,949       26,050,835       3,336,300  
                         
Property and equipment, net     1,003,038       677,094       86,715  
Right-of-use assets     353,807              
Deferred IPO costs     4,226,062       5,587,622       715,600  
Total non-current assets     5,582,907       6,264,716       802,315  
Total assets   $ 21,468,856     $ 32,315,551     $ 4,138,615  
                         
Liabilities and shareholders’ equity                        
Current liabilities                        
Account payables   $ 5,584,927     $ 12,838,317     $ 1,644,189  
Accrued expenses and other payables     12,000       3,542,000       453,620  
Amount due to a related party     18,623       2,422       310  
Amount due to a director     32,451       39,591       5,070  
Operating lease obligation, current portion     370,181              
Contract liabilities     3,892,087       1,739,130       222,728  
Total current liabilities     9,910,269       18,161,460       2,325,917  
                         
Total liabilities     9,910,269       18,161,460       2,325,917  
                         
Commitment and contingencies                        
                         
Shareholders’ equity                        
Ordinary shares, US$0.0000625 par value, authorized 800,000,000 shares as of June 30, 2024 and 2023; 16,000,000 shares issued and outstanding as of June 30, 2024 and 2023, respectively*     7,766       7,766       1,000  
Shares subscription receivable     (7,666 )     (7,666 )     (987 )
Retained earnings     11,558,487       14,153,991       1,812,685  
Total shareholders’ equity     11,558,587       14,154,091       1,812,698  
Total liabilities and shareholders’ equity   $ 21,468,856     $ 32,315,551     $ 4,138,615  
                         

* Giving retroactive effect to the 16,000-for-1 share split effected on October 18, 2022.

GLOBAL ENGINE GROUP HOLDING LIMITED

CONSOLIDATED STATEMENTS OF INCOME

    For the years ended June 30,  
    2022     2023     2024     2024  
    HKD     HKD     HKD     US$  
Revenues                        
Cloud services and data center managed services                        
Third parties’ revenue   $ 35,636,864     $ 15,112,472     $ 39,604,258     $ 5,072,072  
Related parties’ revenue     11,975,000       8,475,000       1,800,000       230,524  
Telecommunication, consultancy and related services                                
Third parties’ revenue     4,507,677       21,096,677       8,046,176       1,030,464  
Related parties’ revenue     2,500,000                    
Total revenues     54,619,541       44,684,149       49,450,434       6,333,060  
                                 
Cost of revenues                                
Third parties’ cost of revenues     37,694,232       36,097,137       40,980,168       5,248,283  
Related parties’ cost of revenues     2,991,456       1,198,545       1,140,000       145,998  
      40,685,688       37,295,682       42,120,168       5,394,281  
                                 
Gross profit     13,933,853       7,388,467       7,330,266       938,779  
                                 
Operating expenses                                
General and administrative expenses     4,468,484       4,244,637       4,480,135       573,766  
Total operating expenses     4,468,484       4,244,637       4,480,135       573,766  
                                 
Income from operations     9,465,369       3,143,830       2,850,131       365,013  
                                 
Other income (expenses)                                
Interest expense     (1,550 )     (34,551 )     (10,367 )     (1,328 )
Other income     39,974       23,403       52,807       6,763  
Total other income (expenses), net     38,424       (11,148 )     42,440       5,435  
Income before income tax     9,503,793       3,132,682       2,892,571       370,448  
                                 
Income tax expense     1,342,379       467,592       297,067       38,045  
Net income   $ 8,161,414     $ 2,665,090     $ 2,595,504     $ 332,403  
                                 
Weighted average number of ordinary shares                                
Basic and diluted*     16,000,000       16,000,000       16,000,000       16,000,000  
                                 
Earnings per share                                
Basic and diluted*   $ 0.510     $ 0.167     $ 0.162     $ 0.021  
                                 

* Giving retroactive effect to the 16,000-for-1 share split effected on October 18, 2022.

GLOBAL ENGINE GROUP HOLDING LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

    For the years ended June 30,  
    2022     2023     2024     2024  
    HKD     HKD     HKD     US$  
Cash flows from operating activities:                        
Net income   $ 8,161,414     $ 2,665,090     $ 2,595,504     $ 332,403  
Adjustments to reconcile net income to net cash provided by operating activities:                                
Depreciation of property and equipment     188,753       326,261       325,944       41,743  
Amortization of right-of-use assets     325,651       402,063       353,807       45,312  
Provision for expected credit losses                 99,775       12,778  
Deferred offering costs           277,759              
Change in operation assets and liabilities                                
Accounts receivable     1,957,627       (7,539,058 )     (8,514,195 )     (1,090,403 )
Prepayment and deposits     (3,317,058 )     3,556,643       (143,218 )     (18,342 )
Contract assets     955,105                    
Prepaid tax           (722,140 )     553,941       70,943  
Account payables     1,147,675       4,437,252       7,253,390       928,933  
Income tax payable     (1,347,483 )     (242,225 )            
Contract liabilities     (637,789 )     (2,106,124 )     (2,152,957 )     (275,727 )
Operating lease obligation     (326,355 )     (384,985 )     (370,181 )     (47,409 )
Net cash provided by operating activities     7,107,540       670,536       1,810       231  
                                 
Cash flow from investing activities:                                
Purchases of property and equipment     (1,483,088 )     (28,397 )            
Net cash used in investing activities     (1,483,088 )     (28,397 )            
                                 
Cash flow from financing activities:                                
Payments of IPO costs     (3,204,829 )     (1,298,992 )     (1,361,560 )     (174,372 )
Proceeds (repayment) of amount due to a director     (359,910 )     (158,277 )     7,140       914  
Proceeds (repayment) of amount due from/to related parties     3,706,968       1,049,199       (16,201 )     (2,075 )
Collection of payment on behalf of a customer                 3,530,000       452,083  
Dividend payments     (1,500,000 )                  
Net cash (used in) provided by financing activities     (1,357,771 )     (408,070 )     2,159,379       276,550  
                                 
Change in cash     4,266,681       234,069       2,161,189       276,781  
                                 
Cash, beginning of the year     1,744,354       6,011,035       6,245,104       799,803  
                                 
Cash, end of the year   $ 6,011,035     $ 6,245,104     $ 8,406,293     $ 1,076,584  
                                 
Supplemental cash flow information                                
Cash paid for income tax   $ 2,689,863     $ 1,431,957     $     $  
Cash received from tax refund   $     $     $ 256,874     $ 32,898  
Cash paid for interest expense   $ 1,550     $ 5,535     $ 1,049     $ 134  
Non-cash activities:                                
Operating lease right-of-use assets obtained in exchange for operating lease liabilities   $ 1,084,738     $     $     $  


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