Fontana Pharmacy is reporting a net profit of $18.4 million for its first quarter ended September 30, 2019, despite a 64.6 per cent decline compared to the corresponding period last year due to the opening of its Waterloo Square branch located at the intersection of Waterloo and West King’s House roads in St Andrew.

In the company’s unaudited financial statement, Chief Executive Officer Anne Chang indicated that operating expenses for the quarter increased by 21 per cent.

Increased expenses were incurred to recruit and train a new team, for store set-up and for increased marketing and promotional activities ahead of the October opening.

Finance expenses also increased by $7 million for the quarter under review. This was due primarily to the increase in fixed assets and inventory from the Waterloo Square store, as well as the impact of International Financial Reporting Standards (IFRS) 16, where the value and liability associated with applicable leased properties are now recognised on the balance sheet.

The IFRS provides a common global language for business affairs, so that company accounts are understandable and comparable across international boundaries. IFRS was developed by the International Accounting Standards Board (IASB), an independent, non-profit organisation.

However, based on the report, the company achieved revenues of $920.7 million, an 8.8 per cent increase over the corresponding quarter in 2018, while total assets at the end of the quarter stood at $2.9 billion, up from $1.5 billion in the previous year, reflecting an increase of $1.4 billion or 97 per cent.

“Now that the new Waterloo Square store has opened, we are encouraged by the response from our customers, and we anticipate healthy growth in our revenues. There was great anticipation about our coming addition at Waterloo Square with its 140 parking spaces, and we are confident that we will benefit from an increased customer base and economies of scale, and that as befits the country’s largest city and business hub, our Kingston operations will drive the growth of Fontana Limited,” Chang stated.

The $200-million-plus investment makes Fontana’s sixth branch, which has just over 100 employees and spreads across 35,000 square feet.

The two-storey location is touted as a cutting-edge expansion of the brand’s existing model. In addition to an artisan centre, it includes a state-of-the-art pharmacy, one-stop beauty hub, extensive baby and children’s selections, home décor collection, cookware department, and business centre, that will ultimately be incorporated at Fontana’s other branches islandwide.