Fontana records its best-ever quarter

Fontana records its best-ever quarter

New Waterloo Square location in Kingston surpassing planned expectations

Business editor

Wednesday, February 26, 2020

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Fontana Limited is reporting the most successful quarter in its more than 50-year history, for the quarter ended December 31, with the new Waterloo Square location in Kingston surpassing planned expectations.

Revenues for the quarter were $1.398 billion, representing a record 31 per cent increase over the $1.07 billion recognised in the corresponding quarter of the previous year. Gross profit also increased to $583.9 million or 29.3 per cent higher than the $451.7 million recorded in the prior year.

“Profit before tax increased by 20 per cent moving from $161.98 million to $194.67 million over the corresponding period, mainly due to the addition of the Waterloo Square location, new customer acquisition and our strategic focus on efficient buying,” the directors said in a letter to shareholders on February 14.

The $200-million-plus Waterloo Square location was Fontana's sixth branch. It has just over 100 employees and is spread across 35,000 square feet. Fontana, which first opened in 1968, has five other locations, including its original location of Mandeville, as well as in Montego Bay, Savanna-la-Mar, Ocho Rios, and Barbican Square in Kingston.

Meanwhile, according to the directors “The increase in operating expenses for the quarter of 35 per cent over the prior year was due primarily to the addition of the Waterloo Square location to our footprint. The grand opening, media launch, lease expenses, staff expenses, and other associated costs account for the bulk of the increase. Expenses were also impacted by the adoption of the new accounting standard on leases, IFRS 16 [International Financial Reporting Standard] , in July 2019”, the directors' letter said.

The unaudited results are the continuation of a very positive trend, as the company was named the best performing stock on the Jamaica Stock Exchange (JSE) for 2019 by Caribbean Value Investor, with capital gains of 273.52 per cent, according to the directors' report to shareholders.

The company had been publicly listed on the Junior Market of the Jamaica Stock Exchange since January 8 last year.

Fontana's total assets at the end of the quarter stood at $3.324 billion, up from $1.959 billion in the comparative prior period, reflecting an increase of $1.365 billion or 70 per cent.

Shareholder's equity grew to $1.429 billion, up from $1.134 billion or 26 per cent over the prior year. Earnings per share for the quarter equalled 16 cents, compared to 12 cents for the corresponding quarter.

“It has been a rewarding and gratifying quarter, and we want to thank our dedicated team and our customers for their continued support,” said Kevin O'Brien Chang and Ann Chang via the directors' letter.

Up to Monday, the last traded price for Fontana shares on the JSE was $6.54. At its launch last year, the share price was $1.88. Its highest price to date was in July last year when shares traded for $8.57. One year ago, on February 26, shares traded at $3.91.

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