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

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.hk; ir.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: [e-mail] Phone: [phone] [phone]

GLOBAL ENGINE GROUP HOLDING LIMITEDCONSOLIDATED 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 LIMITEDCONSOLIDATED 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 LIMITEDCONSOLIDATED 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			$	-			$	-			$	-