7-11 store operator profit surges to P54M last year

By Earl Paolo Jaculbe

05/02/2008

Philippine Seven Corp., local operator of 7-Eleven convenience stores, reported a P54.83-million 2007 net profit, almost three-fold from the previous year’s P20.14-million profit.

Philippine Seven Corp. president Jose Victor Paterno attributed the profit jump to better sales and lower costs.

Total sales rose seven percent to P4.95 billion in 2007 from P4.63 billion a year ago.

Cost of merchandise sold last year rose to P3.53 billion, from P3.22 billion the previous year.

Retail sales of corporate and franchise-operated 7-Eleven stores last year grew by 12 percent to P5.56 billion from P4.95 billion previously.

Revenues from franchise contracts climbed to P204.27 million last year from P147.99 million the previous year with the adding of 40 franchise stores last year.

Sales for each store per day slightly improved to P52,500 last year from P50,000 a year ago.

The company said it was successful in reducing costs last year.

General and administrative expenses, which include store operating and selling expenses, went up slightly by four percent to P1.68 billion last year from P1.61 billion a year ago.

Interest expenses on loans dropped by 12 percent to P31.53 million last year from P35.91 million previously as a result of the payment of loans in advance and low interest rates overall.

Philippine Seven’s total assets grew by three percent to P1.88 billion at the end of last year from P1.83 billion in 2006.

Cash and other liquid assets fell to P308.9 million at the end of last year from P329.4 million in January primarily due to loan repayments.

Total current liabilities went down by five percent to P1.07 billion last year from P1.13 billion in 2006 as a result of the loan payments undertaken last year and less trade payables.

The company’s debts by the end of last year was at P375 million, down from P411.20 million the previous year.

The promotional support from suppliers credited to its marketing income grew to P97.68 million last year from P82.58 million in 2006, Paterno said.

Receivables went up by P25 million as a result of an increase in supplier’s promotional support.

Earnings per share increased to 23 centavos as of last year from eight centavos in 2006.

The company said its shares were trading at 22 times its 2007 earnings, compared to the 2006 price earnings at 33 times.

Paterno said the company plans to have 400 stores by the end of this year, and 500 stores by 2010, which he said would be achieved through an aggressive expansion of network through franchising.

Philippine Seven Corp. ended last year with 311 stores, eight percent more than the 287 stores it had in 2006.

Inventories went down by P8 million last year due to the growing number of franchisees. Out of the total store base last year, 151 were company-owned, while franchisees operate 160 stores.

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