WILCON DEPOT, Inc. is earmarking P2.9 billion for its capital spending in 2020, which it will use to fund plans to open more stores, extend existing ones and upgrade old depots.
In a disclosure to the stock exchange Wednesday, the listed home improvement retailer said it is targeting to have a total of 65 stores by the end of the year, an increase from the 57 it had at the end of 2019. The budget would cover the construction of around eight to nine new depots.
It also reported a 15.8% growth in net income to P2.13 billion for the full year 2019, fueled by the expansion of its store network nationwide.
The growth was backed by a 16.3% growth in net sales to P24.48 billion, cushioning the 12.9% increase in cost of sales to P16.3 billion. Comparable sales growth for the full year was 5.2%.
Depots accounted for 95.9% of Wilcon’s sales in 2019 at P23.47 billion, an increase of 16.5% from a year ago. The company was able to open six new depots last year, which contributed P2.33 billion or 67.9% of the total rise in net sales.
The same store sales growth of depots — or sales from Wilcon’s existing depots — stood at 5% in 2019. The company ended the year with 50 depot branches across the country.
Wilcon’s smaller format store, Home Essentials, added 2.7% or P658 million of the total net sales last year. This is an increase of 6.2% from the level in 2018, coming from a portfolio of seven branches that had a same store sales growth of 4%.
The remaining 1.4% of net sales came from project sales, which contributed P349 million or a 18.6% rise from in 2018.
“Wilcon’s effective implementation of its product mix strategy continued to drive margin expansion. Exclusives’ (in-house and exclusive brands) contribution to net sales increased to 49.5% for the year driving the expansion in the blended gross profit margin to 33.4%,” it said.
Operating expenses recorded a three-year high of P5.4 billion, 22.1% up from the figure in 2018, due to the implementation of a new accounting policy, the expansion of its store network, and an adjustment in statutory wage.
Total capital spending last year clocked in at P2.65 billion, which went to the opening of new stores and warehouses, the extension and renovation of existing stores, and investments in computer software.
“We are pleased with our full year 2019 results,” Wilcon President and Chief Executive Officer Lorraine Belo-Cincochan said in a statement. “These results certainly will encourage us more to continue in our strategic direction and give us assurance that we can deliver consistent growth in the coming years.”
The company is looking at a mid-teen topline and bottomline for 2020 and a 5-6% comparable sales growth.
Shares in Wilcon at the stock exchange closed P18.50 each on Wednesday, down 16 centavos or 0.86%. — Denise A. Valdez