Fontana maintains profit momentum
FONTANA Limited has continued its strong performance as the second-quarter momentum continued into the third quarter (Q3) where its revenue grew by 24 per cent to $1.52 billion.
The company, which operates a pharmacy business and which sells various retail products across its six locations, has grown its revenue and net profit every quarter by double digits since the 2022 financial year (FY) started on July 1. Even with the cost of goods rising, Fontana’s gross profit increased by 21 per cent to $503.01 million, with its gross profit margin barely slipping from 34 to 33.19 per cent.
Despite its total expenses rising by 15 per cent to $370.39 million, its operating profit rose by 39 per cent to $132.62 million. After accounting for higher ‘other income’ and ‘finance’ costs, Fontana’s net profit grew by 43 per cent to $104.58 million. The earnings per share (EPS) rose from $0.06 to $0.08.
When combined with the strong first six months in 2021, Fontana’s nine-month revenue is up by 21 per cent to $4.68 billion — which is just $475.49 million shy of the record $5.15 billion set in its 2021 FY. Its net profit is up by 13 per cent to $414.51 million, and $97.79 million from the $512.33 million earned in 2021. The EPS increased from $0.29 to $0.33.
Fontana’s total assets rose by 29 per cent to $4.46 billion, with its inventory and cash and cash equivalents rising to $1.06 billion and $1.34 billion, respectively. Its total liabilities closed the period at $2.36 billion while shareholders’ equity grew to $2.09 billion. Over the nine months, the company has paid down $134.17 million in debt related mainly to its Waterloo capex loan, and reduced its payable balance by $300.96 million in the quarter.
The company’s stock price increased by three per cent on Monday to $11.08, which leaves the stock up 48 per cent year to date. Fontana’s market capitalisation stood at $13.85 billion. The board of directors is set to meet on May 25 to consider a dividend payment to shareholders.