7-Eleven franchiser’s 2013 profit up 46.7%, sets P2.3B capex this year

By Leslie D. Venzon

MANILA, March 19 (PNA) — Philippine Seven Corp., the local licensee of 7-Eleven convenience stores in the country, is doubling its capital expenditures (capex) this year to expand its store network.

In a statement to the Philippine Stock Exchange, PSC said it will spend P2.3 billion to open new stores and renovate existing ones in 2014.

The company bared its expansion plan after posting a 46.7-percent increase in profit in 2013, largely driven by the increase in sales of all corporate and franchise operated stores.

Its full year net income reached P682.6 million from P465.2 million in 2012.

Retail sales of all stores grew 29 percent to P17.2 billion in 2013 from previous year’s P13.4 billion.

Store count also went up by 21.7 percent with a total of 1,009 stores, while franchise stores accounted for 68 percent of all stores, slightly up from 67 percent in the preceding year.

PSC attributed the sales growth to improving economic conditions and the implementation of the new excise tax law on tobacco and liquor at the start of 2013, and to the success of new food service lines rolled out throughout the year.

“Much of the effect of the new six tax law was temporary, brought about by significant disruptions in the supply chain. Sales in the affected categories have since settled down, although higher prices, steady demand and a more level playing field will continue to benefit these categories going forward,” it said.

As the company continues to scale up, total selling, general and administrative expenses went down as a percentage of revenues from 33 percent in 2012 to 32.5 percent at the end of last year. (PNA)