FTNA reports first quarter net profit of $45.21 million

FTNA reports first quarter net profit of $45.21 million

Fontana Limited (FTNA), for three months ended September 30, 2020 recorded a 21% increase in revenues to total $1.11 billion compared to $920.68 million for the same period in 2019.

Cost of Sales for the period increased 19%, closing at $718.69 million, up from $640.26 million reported the prior year.

As such, gross profit for the three months amounted to $394.92 million, a 25% uptick when compared to $316.41 million recorded last year.

Administrative expenses climbed by 5% for the period, to total $289 million versus $276.55 million in 2019, while selling and promotion closed the three months at $20.76 million (2019: $19.68 million). FTNA noted, “The minimal increase in operating expenses for the quarter of 5% over the prior year, was achieved through our concerted efforts to contain costs and improve efficiencies, while we adjusted our spending mindset in reaction to the changed circumstances brought about by the pandemic.”

As such operating profit saw a 322% increase to $85.16 million relative to $20.18 million booked a year ago. The Company stated, “We continue to benefit from economies of scale with the addition of the Waterloo Square location whose expenses were the major contributing factor to the increases recorded.”

Finance and policy cost for the three months totalled $51.41 million, an increase of 262% when compared to the $14.22 million recorded for the same quarter in 2019, while other income amounted to $11.46 million relative to $12.41 million the prior year. It was noted that, “Finance costs were impacted primarily by the foreign exchange losses recorded in relation to the revaluation of the lease liability (IFRS 16) accounting for $22.8 million of the overall loss.”

This resulted in profit before taxation totalling $45.21 million compared to $18.37 million recorded last year, a 146% increase year over year.

There was no income tax for the period as such net profit rose by 146% to end the period at $45.21 million relative to $18.37 million recorded for the prior year’s corresponding quarter.

Earnings per share (EPS) for the period totalled $0.04 (2019: $0.01). The trailing EPS was $0.24. The number of shares used in our calculations amounted to 1,249,374,825 units. FTNA’s stock price closed the trading period on November 13, 2020, at $4.76.

In commenting on the performance, CEO Anne Chang said “Despite the impact of COVID-19 and reduced operating hours, we saw increases in prescription sales, transaction volumes and average basket sizes. We continue to be encouraged by the growth in new customers, which is driven by our new Waterloo Square location as well as the strength of our brand.”

Balance Sheet at a glance:

As at September 31, 2020, total assets amounted to $3.32 billion, up $388.31 million from $2.93 billion as at the previous year. The increase was mainly due to in ‘Cash and cash equivalents’ which closed the period at $630.88 million (2019: $314.05 million).

Shareholders’ Equity of $1.44 billion was reported (2019: $1.28 billion) which resulted in a book value per share of $1.15 (2019: $1.03).


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.