THE COUNTRY’S largest convenience store operator Philippine Seven Corp. grew its net profit last year by 27.9 percent to P873.3 million on the back of improved operating margin and continued store expansion.
For this year, PSC – the local licensee of 7-Eleven convenience stores in the Philippines – will increase its capital expenditure budget by more than 50 percent to P3 billion to support its accelerated store expansion strategy.
PSC disclosed to the Philippine Stock Exchange on Thursday that this performance in 2014 translated into earnings per share of P1.91 per share compared with the preceding year’s level of P1.49.
The improved financial performance was attributed to the increase in sales of all corporate and franchise-operated stores, which posted growth of 19.3 percent to P20.6 billion at end-2014 compared to the previous year.
PSC ended the year 2014 with a total of 1,282 stores all over the country, marking an increase of 273 stores or 27 percent compared with the end-2013 count of 1,009 stores.
Overall, PSC opened 286 new stores and closed down 13 stores last year.
Jose Victor Paterno, PSC president and chief executive officer, stated that the long-term growth prospects were favorable. He said the organization could sustain its momentum to meet earnings and store expansion goals despite an increasingly competitive environment.
“PSC has taken steps to protect and expand its leadership in light of increased competition, recognizing that rewards for market share are especially strong in the convenience store sector. This involves not only an increased pace of expansion in areas contested by competition, but strategic entry into new territories. The latter may be unprofitable for the first few years due to the high fixed costs of logistics, but we believe will later be rewarded with strong first mover advantages. Last year we entered Panay and built on our entry into Negros and Cebu the years prior. This year we will be entering Mindanao via Davao and CDO,” Paterno said.