HIGHLIGHTS:
Sales grew RM35.6m or 6.1% to 619.3m
• Positive SSSG at 1.9%
• PAT grew 1.9% despite RM8.6m cost incurred on corporate exercise
• Opened 34 new stores for the quarter, bringing the total network to 2,419 stores
Comments from Chief Executive Officer – Colin Harvey
We continue achieving significant improvement in our revenue and net profit for the 1st Quarter of 2020 by 6.1% and 78.6% (excluding corporate exercise expense) respectively YOY. Our strategy roadmap of strengthening assortment, supply chain, operational excellence, store base and digitally enabling the organization continues to bear fruit and despite challenging conditions ahead due to the Covid-19 pandemic, our continuous discipline in executing our strategy roadmap as well as leveraging and seeking out opportunities from our recent corporate acquisitions whilst remaining flexible to adapt to market changes shall ensure that 7-Eleven remains as the nation’s preferred convenience store choice.
Review of Current Quarter Performance versus Corresponding Quarter Last Year
The Group’s revenue for the current quarter grew by RM35.6 million or 6.1% to RM619.3 million. The growth in revenue continued to be driven by the growth in new stores, higher same store sales and better consumer promotion activity. Revenue from fresh food and tobacco segment grew more than 13% and 7% respectively.
Gross profit improved by RM9.5 million or 5.2% to RM192.5 million. This was mainly attributed to the increase in revenue and improved logistics expenses recovery. Other operating income increased by RM4.9 million or 17.2% driven by increase in marketing income.
Selling and distribution expenses for the quarter increased by RM0.7 million or 0.4% driven by new store expansion resulting in higher utilities and rental expenses, partially offset by lower inventory shrinkages.
Administrative and other operating expenses increased by RM9.8 million or 38.3%. This was mainly attributed to RM5.9 million incurred due to corporate exercise in acquiring Caring Pharmacy Group Berhad, higher software maintenance cost and fixed asset written off.
The Group recorded a profit after tax of RM11.4 million, an increase of RM0.2 million or 1.9%. Excluding the cost incurred in the corporate exercise, the Group would have achieved profit after tax of RM20.0 million, an increase of RM8.8 million or 78.6%.
Future Prospects
The Group’s performance is affected by Covid-19 pandemic as our stores in the malls are closed while others are operating under restricted hours during the Movement Control Order. While it is difficult to ascertain changes in consumer behaviour and how the economy will recover, we will continue to explore opportunities for growth in other channels and innovate in our product offerings. We will also continue to focus on our customer’s needs, pursuing our core strategy pillars of Operational Excellence, Cost Management and Commercial Innovation, at the same time refreshing the 7-Eleven brand in the mind of customers though refreshed stores, innovations in our pricing, promotions, and developing exciting products.
