The year 2021 has been a record breaking year for Jamaican publicly listed company, Fontana, which has broken the $5 billion revenue market for the very first time in its history.
In additional, the pharmacy led business has also been generous to its shareholders doling out nearly $200 million in dividends. Fontana boasted that, “through strategic planning and careful execution, we have performed well and are pleased with the results shown in our audited financial statements for the year ended June 30, 2021.”
Revenues for the past year were up to $5.2 billion, a 14.2% increase over the $4.5 billion of the previous year. However, the board led by Kevin Obrien Change explains that, “the past 12 months have been challenging across the landscape of the country’s economy, but in every quarter Fontana’s sales growth outpaced that of the overall Jamaican retail sector.”
This is attributable to the company’s strong brand, wide product range and superior customer experience. Gross profit was $1.9 billion or 14% higher than the $1.7 billion recorded in the prior year and gross margins moved to 37.8% from 37.7%.
Operating profits trending down
Operating expenses decreased by 2.3%, directly attributable to the reduced operating hours and cost containment measures in response to the pandemic. Operating profit grew by 76% to $648 million, as the company was able to keep operating expenses flat while revenues grew.
Profit before tax grew by 105.2% year over year, moving from $264 million to $541 million. Deferred taxation movements resulted in a net profit attributable to shareholders of $512 million, an increase of 85.3% over the $277 million earned in the previous year.
Cash flow has almost doubled, and cash balances continue to grow as we see improvements in revenues from all stores. Shareholder equity grew by $312.4 million, an increase of 21% over last year and Fontana has been able to make two dividend payments in the past year.
Net assets increased by 10% mainly due to the ramping up of the inventories as we prepared for the logistic and supply chain challenges in foreign goods procurement.
Boosting inventory for the coming year
The directors have emphasized that, “as goods become more and more scarce worldwide, shipping and other costs continue to soar, Fontana’s proactive and preemptive moves to increase inventory will put the company in a position of strength for the coming year. As the current retail mantra goes – who has stock is king!”
They highlighted that one of the direct impact of COVID-19 on its operations is that Fontana were again forced to postpone the revamping of our current Point of Sale and Accounting Systems. Both systems are over a decade old and the planned upgrade to a modern state of the art integrated system will create significant improvements in both customer service and back-office efficiency.
Originally scheduled for April 2020, pandemic realities meant changing logistics and the planned implementation for 2021 has also been negatively impacted by continuing COVID-19 complications particularly in the travel industry.