Newly listed Fruitas Holdings, a leading food and beverage kiosk operator, expects to sustain a full-year revenue growth breaching 20 percent for this full year.
In the first six months of the year, Fruitas grew revenues by 29.6 percent year-on-year to P941.19 million. Net income for the first half amounted to P51.97 million compared to P38.98 million in the previous year.
“While we have nearly quadrupled our store network from 260 as of end-2015 to 1,036 just before our listing, we believe there is still significant potential for expansion for both our leader and challenger brands. Our revenue growth of above 20 percent in the first half of the year is expected to be sustained until end of the year,” Fruitas Holdings director and chief financial adviser Calvin Chua said.
Fruitas issued this statement on the heels of some stock selloff. On Tuesday, its shares plummeted by 10 percent to close at P1.16 a share, giving it a market capitalization of P2.77 billion.Since its listing on Nov. 29, Fruitas’ stock price has fallen from the IPO (initial public offering) price of P1.68 a share and post-IPO high of P2.45 each.
Net proceeds from its recent IPO reached P820 million, which would be used to cut debt, boost cash balance and brace for expansion.
Even after the planned debt repayment of P150 million, Fruitas said on Tuesday that its pro forma cash balance of P850 million would far exceed the amount of notes payable, which was expected to be halved from around P409 million to just above P200 million by the end of the year using IPO proceeds and internally generated cash.
“We expect our liabilities-to-equity ratio to improve from 1.6 times as of June 30, 2019, to below 0.5x by the end of the year,” Chua said.
“In addition, our cash reserves place us in a very strong position to take advantage of the significant growth opportunities that are presented to us,” he added.
The first kiosk operator to brave the stock market, Fruitas sold 533.66 million primary common shares to the public at P1.68 a share, bringing 28 percent of its equity to public hands.
Based on the most sanguine forecasts, Fruitas’ equity deal translated to 15.25 times its likely earnings for 2020.
Moving forward, Fruitas aims to open 150 to 250 new stores each year through 2022. It also plans to open two more food parks up to 2021, in addition to existing two hubs which are both in Quezon City.