Hong Kong-based SU Group Holdings (NASDAQ:SUGP), an integrated provider of security-related engineering services, today announced financial results for the fiscal year ended September 30, 2025.
Consolidated revenue increased 5.6% to HK$192.4 million (US$24.7 million) from HK$182.2 million in fiscal 2024, primarily driven by a HK$4.9 million rise in security-related engineering services and a HK$5.3 million increase in security guarding, screening, and related vocational training revenue.
Cost of revenues rose 20.1% to HK$161.6 million (US$20.8 million) from HK$134.6 million, largely due to higher employee benefit expenses of HK$70 million (up from HK$60.4 million), reflecting the expansion of the labor-intensive security guarding and screening business and increases in statutory minimum wage.
Gross profit declined 35.4% to HK$30.7 million (US$4 million) from HK$47.6 million, with gross margin contracting from 26.1% to 16%.
The margin erosion stemmed from lower profitability in engineering projects due to increased subcontracting, reduced equipment leasing margins from competitive contract renewals, and compressed guarding margins from rising labor costs.
Selling, general and administrative expenses also increased 35.2% to HK$48.7 million (US$6.2 million), driven by heightened promotional activities, credit loss provisions, and employee costs, partially offset by lower legal and professional fees.
During the period under review, the company recorded an income tax benefit of HK$0.6 million in fiscal 2025, compared with HK$1.3 million in tax expense the prior year, reflecting lower pre-tax income and deferred tax benefits.
As a result, SU Group reported a net loss of HK$18.5 million (US$2.4 million) for fiscal 2025, with a net loss margin of 9.6%, compared with net income of HK$10.7 million and a 5.9% margin in fiscal 2024.
The company ended the fiscal year with cash and cash equivalents of HK$25.4 million (US$3.3 million) and working capital of approximately HK$62.1 million (US$8.0 million).