Financials for the year ended June 30, 2022: –

Fontana Limited (FTNA) for the year ended June 30, 2022, recorded an 23% increase in revenues to total $6.34 billion compared to $5.15 billion for the same period in 2021. The Company’s revenue for the fourth quarter rose 0.48% to $1.67 billion (2021: $1.66 billion). Management stated, “We continue to experience strong revenue growth in key departments due to increased demand and significant inventory levels.”

Cost of Sales for the period increased 27% to closed at $4.08 billion, up from $3.20 billion reported the prior year’s comparable period, while for the fourth quarter there was a 5% uptick to $1.07 billion (2021: $1.02 billion).

As such, gross profit for the year amounted to $2.26 billion, a 16% uptick when compared to $1.95 billion recorded last year. However, gross profit for the fourth quarter declined 7% from $643.64 million booked in the fourth quarter of 2021 to $597.99 million in 2022. Fontana noted, “We continue to experience strong revenue growth in key departments due to increased demand and significant inventory levels.”

Fontana’s administrative expenses rose by 15% for the period, to total $1.44 billion versus $1.24 billion in 2021, while selling and promotion closed the year at $63.60 million (2021: $55.67 million).

As such, operating profit experienced a 17% increase to $760.61 million relative to $648.43 million booked in the same period last year. Operating profit for the fourth quarter closed at $204.13 million (2021: $367.14 million).

Other income for the year amounted to $73.02 million (2021: $60.18 million). As for the fourth quarter under review, other income closed at $23.08 million versus other income of $43.21 million booked in 2021’s fourth quarter.

Finance cost year to date totalled $217.07 million, an increase of 30% when compared to the $167.23 million recorded for the same period last year. While for the quarter finance cost amounted to $25.20 million (2021: $103.61 million),  a 76% decline.

This resulted in profit before taxation totalling $616.56 million compared to $541.38 million recorded last year, a 14% year over year increase. For the quarter profit before taxation moved from $306.75 million in 2021 to $202.01 million in 2022, a 34% decline year over year.

Taxation charge for the year amounted to $10.36 million (2021: $29.05 million).

Net profit for the year increased 18% to $606.20 million compared to $512.33 million booked for 2021 period, net profit for the fourth quarter amounted to $191.66 million compared to $277.69 million in 2021.

Earnings per share (EPS) for the period totalled $0.49 (2021: $0.41). EPS for the fourth quarter amounted to $0.15 (2021: $0.22). The number of shares used in our calculations amounted to 1,249,374,825 units.  FTNA’s stock price closed the trading period on August 29, 2022, at $9.01 with a corresponding P/E of 18.57 times.

Balance Sheet at a glance:

As at June 30, 2022, total assets amounted to $4.55 billion, up $1.08 billion from $3.47 billion as at the previous year. The increase in total assets was as a result of the increase in ‘Cash and Cash Equivalents’ and ‘Right of use Asset’ which closed the period with $1.49 billion (2021: $859.23 million) and $949.63 million (2021: $747.67 million), respectively. Management noted that “Cash flows improved by 74%, and cash balances continue to grow as revenues increased across all stores. This was bolstered by the proceeds from our December 2021 bond issue for CAPEX and expansion. Shareholder equity grew by $356 million, an increase of 19.7% over last year, enabling Fontana to make two dividend payments totaling $250 million during the year.”

Shareholders’ Equity of $2.16 billion was reported (2021: $1.81 billion) which resulted in a book value per share of $3.57 (2021: $3.52).