Puregold ups 2013 capex for more stores

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Listed retailer Puregold Price Club Inc. decided to jack up its capital expenditure for the year to P3.5 billion from the original P3 billion, as it plans to roll out more stores than what it planned to build within the year.

In a company presentation, Puregold announced that it has officially raised its 2013 capital expenditure (capex) to P3.5 billion after increasing its store opening target to 35 this year instead of only 25 stores.

In the first half of 2013, the group opened an additional 21 stores. This brought the total number of the group stores to 192 as of June 30, 2013, including seven S&R branches and 15 branches from Company E.

According to the Lucio Co-led supermarket chain, there are still 15 new Puregold store locations contracted in various stages of design development and construction.

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Puregold concluded the first half of the year with a consolidated net income of P1.7 billion, representing an increase of 71.5 percent over its consolidated net income of P1 billion for the same period in 2012.

This, according to the company’s financial statements posted on the website of the Philippine Stock Exchange, was the result of the continuous strategic expansion of the group, including the major acquisitions it undertook in the previous year and in the first quarter of the 2013.

For the six-month period, the group also posted consolidated net sales of P33 billion for an increase of P9.7 billion, or 41.9 percent, compared to P23.3 billion in the same period in 2012.

Puregold targets to grow its full-year net sales by 30 percent from P57.5 billion, as well as a net profit margin of 5.1 percent. The company also said that it aims “to pursue acquisitions as a template to further geographic expansions.”

News stores put up in 2012, which were fully operating in 2013, accounted for 11 percent of consolidated net sales of Puregold and contributed 33.1 percent to total sales in the first half of 2013. Its S&R brand also further increased the consolidated net sales with a 44.2-percent share to total growth.

On January 14, 2013, Puregold acquired 100 percent of the outstanding capital stock of Company E Corp., which is similarly engaged in the business of trading goods such as supermarket products on a retail and wholesale basis. On February 26, 2013, the application for the merger of the Gant Group and Puregold Jr. Supermarket with the parent company as the surviving entity was approved by Securities and Exchange Commission.

Effectively on date of approval, the parent company absorbed 33 stores from Puregold Jr. and 19 stores from the Gant Group.

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