Wilcon expects faster sales growth in next five years

WILCON Depot, Inc. is looking to realize a 13-15% annual increase in sales in the next five years, as its initial public offering (IPO) next month accelerates its expansion particularly in the Visayas and Mindanao.

“We are expecting a big growth because of the branches that we will put up,” Wilcon Founder and Chairman Willam T. Belo told reporters late Monday in Makati City, after turning over a P6million donation to Gawad Kalinga for the construction of 40 houses in Sulu.

The home improvement and construction supplies retailer should achieve a 15% jump in net sales to around P18 billion by yearend and sustain a 13-15% growth going forward, Mr. Belo said.

The executive estimated that Wilcon managed to close last year with around P15 billion in net sales. The projected amount settles 7% above the P14.45 billion reflected on the company’s financial statements for 2015.

Operating efficiencies further pushed Wilcon’s net income to “the north of P900 million” last year, way above the P538 million realized in 2015, Chief Financial Officer Mark Y. Belo told reporters on the sidelines of the same event.

In the first nine months of 2016, the company pencilled a 10% yearon-year increase in net sales to P11.73 billion from P10.64 billion. It netted P483 million during the period, 50% higher than last year’s P323 million.

Wilcon is banking on the expansion of its store network, which it intends to accelerate using proceeds from its maiden share sale amounting to a maximum of P7.92 billion.

The company targets to offer 1,393,906,200 common shares for a maximum price of P5.68 apiece on March 13-17 and subsequently debut on the Philippine Stock Exchange (PSE) on March 23, according to the maiden share sale’s prospectus updated on Feb. 17.

Wilcon Depot tapped First Metro Investment Corp. as manager, bookrunner and lead underwriter of the offering that will pass 34% of the company’s outstanding 4,099,724,116 common shares onto public hands.

The company looks to net P7.58 billion from the IPO. Of the total, it intends to disburse P6.11 billion for store network expansion until 2021; P972.4 million for debt repayment until 2018; and P500 million for general corporate purposes until 2018.

Wilcon will open 29 stores until 2021 in Cavite, Butuan, Zamboanga, Iloilo, Tacloban, Cabanatuan, Bicol, General Santos, Davao, Lucena, Isabela, Tagum, Tuguegarao and Surigao.

The company will open nine stores within the year alone.