Preparing for Kingston and St Catherine expansion
Pharmacy chain Fontana Limited continues to deliver increased profits with net profit for the March 2022 third quarter jumping to J$104.6 million, compared with J$72.9 million for the comparable period in 2021.
This represented an increase of 43.4 per cent and earnings per share (EPS) of J$0.08 versus $0.06 for 2021.
The company is advising shareholders that dividends will be considered at a Board of Directors’ meeting to be held on May 25.
Net profit for the combined three quarters increased by 13 per cent to J$414.54 million relative to J$366.70 million in 2021. EPS for the combined three quarters totalled J$0.33, up from J$0.29 in 2021.
Higher staff cost drove up expenses
Revenues for the quarter amounted to J$1.52 billion, representing an increase of 23.9 per cent over the J$1.22 billion for the corresponding quarter of the previous year. Cost of sales grew by 25.5 per cent in line with the sales while gross profit increased by 20.8 per cent, moving from $416.4 million in Q3 last year to $503 million this quarter.
Gross profit margin was slightly off at 33.2 per cent compared to 34 per cent last year, which is due to the fact that Fontana continues to experience increased cost of goods due to inflation and global supply chain challenges.
Operating expenses increased by 15.4 per cent to J$370 million, up from J$321 million in 2021. Staff costs were the main driver, as salary increases were granted at the beginning of the quarter and the operating hours were also being increased, as the COVID-19 protocols subsided.
Despite the increase in operating expenses , operating profit increased by 39 per cent to J$132.6 million this quarter. Finance costs were impacted primarily by the IFRS 16 lease assessment as an additional long-term lease was added in this financial year.
The finance costs associated with the bond issued in December 2021 also impacted the total finance cost. Total assets at the end of the quarter stood at J$4.5 billion, up from J$3.4 billion in the previous comparative period, reflecting an increase of 29.4 per cent.
Fontana says its expansion into Kingston and St Catherine remains on track, noting that “as we begin our preparations for the expansion in Kingston and St Catherine, our cash on hand remains favourable at J$1.34 billion, an increase of 65.5 per cent over last year. Shareholder’s equity grew to J$2.1 billion, up from J$1.76 billion or 19.1 per cent over the prior year”.