MANILA, Philippines - Philippine Seven Corp., the local franchisor of the 7-Eleven convenience store chain, is raising its authorized capital to P600 million from P400 million to cover its projected 15-percent stock dividend issuance to shareholders for the next three years.
Phil-Seven chairman Vicente T. Paterno pointed out that the company’s earnings will continue to grow this year, albeit at a moderate pace compared to the previous years’ growth.
Paterno said the company has steadily grown its net income by 78 percent year-on-year since 2005 when his son, Jose Victor, assumed the helm of Phil-Seven. This trend, however, is not expected to continue given tough business conditions, Paterno said, noting that 2010 benefited from a stronger economy and a buoyant consumer spending, boosted by the national elections.
“This year’s increase in income will not be as strong as what was reported in the last two years, “Paterno said.
PhilSeven grew its net earnings by 78 percent last year to P276.9 million, largely due to higher system-wide sales and new store openings.
The steady growth in the company’s net earnings was made possible by stabilizing business infrastructure, doubling the store base through franchising, and leveraging economies of scale.
In the nine months ending September 2011, Phil-Seven reported a two-percent drop in net profit to P174.7 million even as system-wide sales, which account for sales of all corporate and franchise operated stores, rose 16 percent to P7.7 billion.
In the third quarter, however, the company reported a 19-percent rise in net income to P56 million, mainly driven by the improvement in store sales and growth in number of stores.
As of end-September this year, Phil-Seven’s store network stood at 632 from 520 in 2010.
Lawrence De Leon, finance division manager at Phil-Seven, said the company is looking to end the year with a total of 690 outlets. About 150 more new stores are being planned for opening in 2012 as part of the group’s goal to hit 1,000 branches by 2013.
The company is hoping to take advantage of the deluge of business process outsourcing (BPO) office buildings sprouting in Metro Manila.