Fruitas beefs up its cash position

Fruitas Holdings Inc. has fortified its financial position as internally generated cash and ₱820 million in net proceeds from the sale of new shares will boost its cash balances and cut debt levels.

In a statement, Fruitas said that consolidated cash balance exceeded ₱1 billion immediately after its initial public offering-on a pro forma basis and based on its latest audited financial statements as of June 30, 2019.

Even after the planned debt repayment of ₱150 million, pro forma cash balance of approximately ₱850 million will far exceed the notes payable balance, which is expected to be halved from around ₱409 million to just above ₱200 million by end of the year, using IPO proceeds and internally generated cash.

“We expect that our liabilities-to-equity ratio to improve from 1.6x as of June 30, 2019, to below 0.5x by end of the year,” Fruitas Holdings Director and Chief Financial Adviser Calvin Chua said.

He added that, “our cash reserves place us in a very strong position to take advantage of the significant growth opportunities that are presented to us.”

Fruitas also highlighted the growth momentum that it has generated in the past years.

“While we have nearly quadrupled our store network from 260 as of end-2015 to 1,036 just before our listing, we believe there is still significant potential for expansion for both our leader and challenger brands,” Chua noted.

He projected that, “Our revenue growth of above 20 percent growth in the first half of the year is expected to be sustained until end of the year.”

Fruitas said its highly scalable business model and strong revenue growth differentiate it from other listed foodservice peers in the Philippine Stock Exchange which have only registered single-digit percentage revenue growth for the first nine months of 2019 due to various factors according to their respective interim financial statements.