Comments from Chief Executive Officer – Colin Harvey
We are pleased with our Full Year Ebitda growth of 5.6%, however we continue to see opportunity for improvement. We are confident that our strategy roadmap focussed on strengthening the key areas of, assortment, supply chain, operational excellence, store base, and digitally enabling the organization will bear fruit in terms of financial performance, and overall customer shopping experience. I look forward to the challenges ahead in ensuring that 7-Eleven remains Malaysia’s first choice convenience store.
Review of Current Quarter Performance versus Corresponding Quarter Last Year
The Group’s revenue for the current quarter of RM554.3 million grew by RM8.0 million or 1.5% against the corresponding quarter’s revenue in the previous year of RM546.2 million. The growth in revenue continued to be driven by the growth in new stores, higher average spend per customer and better consumer promotion activity.
Gross profit of RM208.3 million improved by RM11.0 million or 5.6% compared to the corresponding quarter in the previous year. This was mainly attributed to the increase in revenue and improvement in gross margin by 1.5% points. The improvement in gross profit was attributed to higher gross profit margins across most categories boosted by marketing income.
Other operating income of RM1.8 million decreased by RM8.3 million or 81.9% compared to quarter of previous year, primarily attributed by compensation income from vendors of RM7.5 million in the previous year.
Selling and distribution expenses for the quarter increased by RM9.6 million or 6.2% against the corresponding quarter in the previous year. This was mainly due to new store expansion resulting in higher staff related costs and rental costs.
Despite increase in revenue, gross margin improvement and higher marketing income, the Group recorded a decrease of RM3.3 million or 21.1% in profit after tax due to higher other operating income in previous year.
Review of 12 Months Period Performance versus Corresponding Period Last Year
For the 12 months ended 31 December 2018, the Group’s revenue of RM2.22 billion grew RM29.0 million or 1.3% against the previous year of RM2.19 billion. The growth in revenue was driven by the growth in new stores, improvement in same store sales and consumer promotion activity.
Gross profit improved by RM41.8 million or 5.4% compared to the corresponding period in the previous year. This was mainly attributed to the revenue growth and gross profit margin expansion of 1.4% points. Other operating income decreased by RM12.2 million or 68.9% compared to the previous year.
The Group registered profit after tax of RM51.3 million which is RM1.2 million or 2.4% increased against the previous year driven by higher profit contribution amongst most product categories and higher marketing income offset against lower other operating income.
Future Prospects
The Board of Directors is of the view that the trading conditions for the next quarter are expected to improve driven by domestic demand and anticipated heighted consumer sentiment. The Group will continue to refresh the 7-Eleven brand in the mind of the customer though innovations in our promotions, the products and pricing. We expect to see further improvement in the next quarter by pursuing our core strategy pillars of Operations Excellence, Cost Management and Commercial Innovation.
