Microware (01985) reported a sharp turnaround for the fiscal year ended 31 March 2026 (FY26), with profit and total comprehensive income surging 345.3% year on year to HK$28.50 million despite a 12.8% drop in revenue to HK$1.30 billion.

Revenue and Segment Mix • Group revenue fell HK$190.34 million to HK$1.30 billion, driven by a 14.1% contraction in the core IT infrastructure solution services segment to HK$1.16 billion. • IT managed services remained resilient at HK$143.13 million, flat versus FY25. • Segment contribution: IT infrastructure solutions accounted for 89.0% of turnover; IT managed services contributed 11.0%.

Margins and Profitability • Cost of sales declined 13.4% to HK$1.13 billion, outpacing the revenue fall and lifting gross margin to 13.25% (FY25: 12.62%). • Operating expenses contracted 16.7% to HK$138.95 million, reflecting lower distribution, administrative, and R&D spend. • Operating profit more than doubled to HK$36.84 million (FY25: HK$18.11 million). • Net profit rose to HK$30.21 million, translating into basic EPS of HK$0.10 (FY25: HK$0.03).

Cash Flow and Balance Sheet • Cash and cash equivalents stood at HK$68.06 million (31 March 2025: HK$160.92 million). • Bank borrowings expanded to HK$97.80 million (31 March 2025: HK$22.51 million), pushing the net gearing ratio to 43.1% (31 March 2025: 10.11%). • Net current assets improved to HK$168.62 million (31 March 2025: HK$148.92 million). • Capital expenditure was curtailed to HK$0.50 million, down from HK$7.00 million a year earlier. • Pledged bank deposits rose to HK$75.19 million (31 March 2025: HK$54.76 million).

Dividend and Shareholder Returns • The board will not recommend a final dividend for FY26; a special dividend of HK$0.10 per share was paid in FY25.

Operational Highlights • The company maintained a workforce of 270 employees (FY25: 242) with total staff costs of HK$149.11 million. • Microware received multiple vendor awards in FY25, underscoring its position in Hong Kong’s competitive IT solutions market. • Management attributes the earnings recovery to tighter cost control, higher other gains, and growing AI-related business momentum.

Outlook Management plans to deepen core IT and AI-driven offerings across the Guangdong–Hong Kong–Macao Greater Bay Area and Southeast Asia while maintaining cost discipline to bolster resilience amid global economic uncertainties.

The annual general meeting is scheduled for 27 August 2026; the share register will be closed from 24 to 27 August 2026 for voting entitlement determination.