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Baht/$ 34.08/10 (Bid/Ask)
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GOLD |
12,800
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CONVENIENCE STORES
CHADAMAS CHINMANEEVONG
Customers gather outside a 7-Eleven store, operated by CP All Plc. The company expects revenue growth of 15% this year and net profit gains of 20%. Thailand is the fourth-largest world market for 7-Eleven, and similar Vietnamese consumer behaviour has the company eager to expand to that country. |
CP All Plc, the operator of 7-Eleven convenience stores in Thailand, aims to build revenue this year by 15% or 12.2 billion baht and net profit by 20% or 500 million baht, despite political turmoil and economic turbulence. Deputy CEO Pittaya Jearavisitkul said the business had experienced no impact from either stumbling block.
During the first half of 2008, the company's revenue rose 16.8% year-on-year to 64.99 billion baht while net profit was up from 850 million baht to 1.94 billion baht.
The company reported a second-quarter net profit of 864 million baht on revenue of 32.13 billion, up from profit of 267 million baht on revenue of 27.68 billion in the same period last year.
First-half same-store growth was 9.2% year-on-year, up from a rate of 6.5% in the same period last year. Second-quarter same-store growth was 10.6%, up from 5.6%.
Average spending per ticket in the first half was 57 baht, unchanged from last year, and total customers per store per day grew year-on-year from an average of 1,149 to 1,197.
Kriengchai Boonpoapichart, CP All's head of finance and investor relations, said the company would now be focusing on foods and ready-to-eat products because of their high margins.
Having opened 294 stores in the first half of the year, CP All intends to open at least 106 more 7-Eleven outlets in the second half. These will bring its total number of stores to 4,679 by the year's end. It has set a target of 5,000 stores by 2009 and 7,000 stores by 2013.
To support its expansion plan, the company has set an annual investment budget of 3.5 billion baht and plans to open three new warehouses in the provinces by 2011.
In China, CP All is aiming to conclude the sale agreed on last year of its Lotus Supercenter business to Hong Kong's Chia Tai Enterprise International. However, the deadline for the sale has been extended from July 15 until the end of this year pending Chinese government approval, said Mr Kriengchai.
During the first half of the year, CP All's 42 Lotus Supercenter outlets in China reported losses of 511 million baht on revenue of 16.94 billion baht, compared to losses of 1.77 billion baht and revenue of 15.5 billion baht in the same period last year.
In Vietnam, Mr Pittaya said the company was considering an expansion to take advantage of a legal change expected by Jan 1 that would allow foreign investors to invest in convenience stores.
He added that Vietnam had high potential because Vietnamese spending behaviour is similar to that of Thai people, whose fondness for convenience stores has made the country the world's fourth largest market for 7-Eleven.
CPALL shares closed yesterday on the Stock Exchange of Thailand at 10.80 baht, unchanged, in trade worth 28.98 million baht.
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