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Pharmacy operator Fontana Limited recorded a dip in profit due to higher taxation, but the outlook remains strong.
“Our second quarter is anticipated to be the best yet!” Fontana declared in the preface to its financials, referencing the October-December 2024 period.
The company anticipates a boost in sales from the upcoming Christmas shopping season, supported by contributions from its newest store in Portmore.
Fontana generated $2 billion in sales and $60.5 million in profit after tax for the September quarter, compared to $1.8 billion and $61.4 million a year earlier.
The listed pharmacy company said that it recently reached a five-year tax milestone, having listed on the junior stock exchange in 2019, now qualifies for only a 50 per cent waiver.
Consequently, it moved from paying zero income tax in the 2023 quarter to a tax bill of nearly $12 million in the current review period.
“This achievement means we now have liability to corporate income taxes, which required a provision of $11.9 million for the quarter,” the company said.
Under the JSE Junior Stock Exchange rules, companies enjoy a full income tax holiday for five years, followed by a reduced rate of 12.5 per cent of profits for the subsequent five years. The company is required to stay listed on the Jamaica Stock Exchange for no less than 15 years, otherwise the waived taxes will be clawed back by the tax authorities.
“While the impact of taxation has dampened Fontana’s short-term earnings, the company remains optimistic about its long-term prospects,” the company said in its report to shareholders. Fontana aims to “navigate the evolving retail landscape” by leveraging the company’s brand reputation, pharmacy network, and customer service focus.
Fontana, which is majority-owned by the Chang family, a chain of seven pharmacies nationally. Revenues increased across all locations, including its newest store in Portmore, St Catherine, which has largely maintained its break-even monthly sales.
“Transaction counts, average spend per customer, and prescription counts continue to show month-over-month gains as we grow our footprint in St. Catherine,” Fontana reported.
Fontana listed 1.25 billion ordinary shares on the JSE junior market at $1.88 per share in January 2019. The stock currently trades above $8.
The company, which is headed by Anne Chang as CEO and Kevin O’Brien Chang as chairman, maintains a solid financial position with total assets of $5.56 billion and capital of $2.65 billion as of September.
English (US) ·