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Fontana sheds debt in countdown to Waterloo

Published:Wednesday | September 4, 2019 | 12:05 AM
A graphic representation of the Fontana Waterloo Square development being finalised in Kingston.
A graphic representation of the Fontana Waterloo Square development being finalised in Kingston.

Fontana Limited, which raised $235 million of equity capital in an initial public offering of shares and listed in January, has paid off nearly all its debts.

It means the increased revenue expected for the Chang family-controlled pharmacy company when its new Waterloo Road branch in Kingston opens before year end will be largely unencumbered by financing charges.

Fontana has reported $465 million as work in progress to its premises, which would relate largely to its new complex, which is set to house Fontana’s operations, as well as other retail shops.

The value of property and premises across the group totals $968 million in gross value.

For its financial year ending June, Fontana Limited paid out more than $200 million in bank debt, according to its cash flow statement, leaving $12.1 million of loans on its books. The largest borrowing relates to a Bank of Nova Scotia bridge loan repayable in 12 months at 6.0 per cent interest as financing for the Waterloo store buildout, said its financial report.

The company did not respond to requests for comment on its financial results.

During the financial year, its finance costs declined year on year because of higher foreign-currency gains, but its bank interest payments actually increased to $22.6 million, from $19.6 million a year earlier.

Even with the payout of loans, the company still increased its cash position, closing the year with $383 million, from $253.8 million a year earlier.

Fontana Waterloo is scheduled for completion this month, according to previous disclosures by CEO Kevin O’Brien Chang. It’s expected to be the largest of Fontana’s complexes.

The company also operates outlets at Barbican in Kingston; Eight Rivers Town Centre in Ocho Rios, St Ann; Beckford Plaza in Savanna-la-Mar, Westmoreland; Manchester Shopping Centre, Mandeville; and Fairview Town Centre, Montego Bay. Its product range includes pharmaceuticals, personal-care products, cosmetics, houseware, and toys.

For the year ending June 2019, Fontana posted revenue of $3.7 billion, up nine per cent from $3.4 billion. Profit increased from $247 million to $306.6 million because of tax credits. Pretax profit fell 11 per cent to $270 million.

steven.jackson@gleanerjm.com