Midland to slash costs after interim profit dives
Property agent Midland Holdings says it will launch a series of cost-cutting measures after reporting a 29.57 per cent decline in interim profit.
The firm said it would take the initiative to lower labour, materials and financial costs. It would also strictly monitor marketing and administrative expenses to improve cost efficiency for staff and value for shareholders.
'Some branches may be relocated from high rental premises to less expensive properties in the same neighbourhood, thus achieving substantial savings on respective branches' rental costs,' the company said.
Midland announced first-half net profit was HK$160.27 million compared with HK$227.58 million a year ago, as turnover rose 5.21 per cent to HK$1.63 billion.
An interim dividend of 6.5 HK cents was declared, down from 16 HK cents from a year ago.
Hong Kong property sales have been declining since July, hurting income of estate agents who rely on commissions.
Property transactions plunged to 6,402 last month, the lowest since January 2006 while total value shrank 44 per cent to HK$18.3 billion last month.
Since keen competition would continue, Midland said a decline in transaction volume would make it difficult for small and medium-sized agencies to build their businesses.
'In such circumstances, the group is positive about business prospects with reasonable market competition,' Midland said.
The decline in first-half earnings was due to a surge in operating costs, including staff costs and lease rentals, the group said.
Staff costs were pushed up by factors such as the new law that included commission in the calculation of wages and an increase in headcounts.
At one point yesterday, shares in the company dropped to a 52-week low of HK$2.78 before recovering to end the day 0.94 per cent up at HK$3.22.
Tepid market
Hong Kong property transactions last month shrank 44 per cent to, in HK$: $18.3b
