Puregold’s board approves plan to issue P12-billion notes

Puregold Price Club Inc. plans to issue P12 billion worth of corporate notes to fund the rollout of more grocery stores across the country.

Puregold said in a disclosure to the stock exchange Friday its board of directors approved the fund-raising activity as an opportunistic strategy to raise long-term money at low-interest rates.

“The proceeds will be deployed for growth initiatives and to accelerate business expansion by opening more Puregold and S&R stores in strategic areas in order to continue to provide basic goods and essential products in those markets,” it said.

The company did not disclose the terms of the notes. It appointed China Bank Capital Corp. as the lead arranger, underwriter and sole bookrunner for the proposed transaction.

Puregold has 444 stores nationwide under Puregold and S&R brands and QSR (quick service restaurant) formats with total net selling area of 580,000 square meters.

Puregold earlier budgeted P3.4 billion for 2020 capital expenditures mainly to build 25 new Puregold stores, two S&R sores and QSR restaurants.

Puregold reported a net income of P3.4 billion in the first half, up by 20.1 percent from P2.83 billion in the same period in 2019.

The company said it posted stronger-than-expected same store sales growth of 9.2 percent in the first half, driven by higher consumer spending and pantry loading prior to the Covid quarantine and the continued store operations even during lockdown.

Consolidated net sales increased by 15.1 percent to P81.96 billion in the first half. It said bulk of the revenues or 76 percent came from the Puregold store network and 24 percent from S&R membership warehouse clubs and S&R New York Style Pizza stores.

Income from operations grew 19.2 percent to P5.71 billion in the first half from P4.79 billion in the same period last year.

The share price of Puregold dropped 2.73 percent Friday to P48.10.

Topics: Puregold Price Club Inc. , grocery stores , China Bank Capital Corp. , S&R New York Style Pizza
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