CA Cultural Technology Group Limited reported audited results for the year ended 31 March 2026. Revenue slipped 1.8% year-on-year to HK$360.44 million, while gross profit jumped 35.9% to HK$121.11 million on a markedly higher gross margin of 33.6% (FY25: 24.3%).

Profitability reversed sharply. The company booked a loss attributable to owners of HK$99.94 million, more than triple the HK$33.04 million loss recorded a year earlier. Basic loss per share widened to 8.5 Hong Kong cents from 2.8 cents.

Segment performance • Animation derivative products: revenue fell 7.3% to HK$136.43 million. • Indoor theme parks: revenue edged up 1.7% to HK$222.93 million, buoyed by consultancy and design services that carry higher margins. • Multimedia animation entertainment: revenue increased to HK$1.08 million (FY25: HK$0.64 million).

Cost dynamics and other items Cost of sales contracted 13.9% to HK$239.33 million, reflecting lower depreciation on theme-park assets and reduced machinery sales. Selling and distribution costs rose 36.7% to HK$29.84 million, aligned with higher promotional spending on AI-related consumer products. Finance costs climbed 9.3% to HK$106.14 million. A HK$3.12 million net impairment charge under the expected-credit-loss model replaced the HK$24.01 million reversal booked in FY25, while other gains swung from a HK$45.89 million gain to a HK$0.56 million loss as one-off lease-related gains did not recur.

Balance-sheet pressure The group ended March with cash and bank balances of HK$19.20 million against total bank and other borrowings, bonds and a guaranteed note of HK$974.84 million, of which HK$938.68 million are due within 12 months. Net current liabilities stood at HK$1.29 billion and total net liabilities at HK$1.17 billion. The company remains in default on HK$721.07 million of bonds, a HK$25.00 million guaranteed note and HK$121.74 million of other borrowings.

Going-concern and restructuring Auditors drew attention to material uncertainties over going concern. Management’s cash-flow projections hinge on completing a debt restructuring via a court-sanctioned creditors’ scheme, new financing and cost controls. The proposed plan includes a minimum HK$160 million cash contribution and the issue of 59.0 million new shares to scheme creditors, together with share and convertible-bond subscriptions by an independent investor. As of the results date, the subscriptions and scheme had not yet become effective; the long-stop date has been extended to 31 July 2026.

Capital expenditure and R&D Deposits of HK$23.81 million remain for planned Wonder Forest and Joypolis developments in Shanghai, while HK$50.00 million is earmarked for future Joypolis projects. Research and development spending increased to HK$9.49 million (FY25: HK$8.16 million).

Dividend In light of the loss and ongoing restructuring, the board proposed no final dividend.

Outlook Management intends to expand the Joypolis licensing model, pursue cost efficiencies, and continue negotiations to finalise the debt restructuring in order to stabilise the balance sheet and support future operations.