Mandaluyong— (PHStocks)—Philippine Seven Corp. (PSC, PSE: SEVN), the local licensee of 7-Eleven Convenience Stores, registered a 15.4% growth in net income in 2015 enabling it to surpass the PhP1 billion-mark. The improved financial performance was largely driven by the increase in sales of all corporate and franchise-operated stores, which grew by 25.3% to PhP25.8 billion from PhP20.6 billion in 2014.
PSC ended 2015 with a total of 1,602 stores all over the country, up by 25.0% compared with same period in the preceding year. The company achieved another milestone by entering Mindanao. It opened stores in Davao City and Cagayan de Oro during the second quarter. At the end of 2015, there were 1,391 7-Eleven stores in Luzon, 178 in Visayas and 33 in Mindanao.
Jose Victor Paterno, President and CEO, stated, “the rest of the country is relatively uncontested in comparison. We are virtually the only competitor with the critical mass to build out proper supply chains in areas logistically unreachable from GMA. Such supply chains come at a medium term cost in terms of underutilized warehouses. We expanded our existing distribution centers and opened new warehouses in 2015. We ended the year with nine warehouse facilities, (throughout Luzon, Mindanao, and 3 islands in the Visayas), vs four in mid 2014. To put such costs in perspective, operators in contiguous territories typically serve 1000 stores per DC (though we have downscaled and adapted our model to be cost effective for smaller areas). We wager that first movers, especially on islands that cannot sustain more than one or two warehouses, will be rewarded with unusually dominant share (at 90 stores, we have over 80% share in Cebu), and that BPO trends will continue to drive growth in the remote urban areas of Luzon and the islands.”
For this year, the company will be increasing its capital expenditures budget to PhP3.5 billion to support its accelerated store expansion strategy. Bulk of the said amount is allocated to new store opening, store renovation and equipment acquisition.
Philippine Seven Corp. operates the largest convenience store network in the country. It acquired from Southland Corp. (now Seven Eleven Inc.) of Dallas, Texas the license to operate 7-Eleven stores in the Philippines in December 1982. It was listed in the Philippine Stock Exchange on February 4, 1998.