CPL group posts K19.13 million net profit

By MALUM NALU

City Pharmacy Ltd Group, Papua New Guinea’s biggest retailing network, on Tuesday announced an after-tax profit of K19.13 million as it celebrates its 25^th year of operations in the country.

Chairman, Mahesh Patel, announced the profit when presenting CPL’s 2011 annual report and audited financial statement during a media briefing at the group’s head office at Gerehu Stage 6, Port Moresby.

CPL Group of Companies hydroponics supervisor, Morea Gau, shows lettuce that is grown at the company's hydroponics farm at Gerehu Stage 6, Port Moresby, and sold at Stop N Shop supermarkets around the city.-Picture by MALUM NALU

The profit is an 86.81% increase from the K10.24 million it recorded in 2010.

A dividend of 5t per share plus a bonus of 2t per share has been proposed, and after approval at CPL’s annual general meeting on April 26, will be paid in equal tranches in May and July 2012.

The report shows that sales increased by 27.57% to K321.77 million, group assets increased from K70.81 million to K85.78 million, return on equity increased from 14.46% to 22.30%, and operating expenses to turnover increased by 0.5% due to unprecedented costs.

Patel said while there had been contribution from the LNG project to some extent, CPL had experienced unprecedented increases in property rental cost, security costs, and other operating expenses.

He gave full credit to the 2,182 staff and management of CPL, who he said had contributed immensely to the success of the group in 2011.

“We had probably one of our best years last year,” he told reporters and representatives from the finance sector.

“Our challenge now is to beat last year.

“We’re fairly confident that we can keep on growing, the way the economy is growing.”

CPL highlight for 2011 included:

• ·         Its customer engagement strategy – Real Rewards Plus – was rolled out into the stores in electronic format;

• ·         A refurbishment of its Lae pharmacy and relocation of the pharmacy at Port Moresby General Hospital;

• ·         Opening of a second pharmacy in Madang;

• ·         More cost-consciousness;

• ·         Appointment of John Woolfield as general manager; and

• ·         A commitment to long-term sustainable growth and pursuit of strategic opportunities.

Patel said with continued economic growth in PNG, CPL was confident that its strong and solid returns would continue in 2012.

“We will continue to strengthen our medium to long-term position during the year through capital investments – budgeted at K7.25 million – in our core business and via new growth opportunities,” he said.

“We will also look at expansion overseas to leverage our scale and international sourcing capabilities.

“We will continue our focus in promoting and helping PNG farmers to bring produce to market…we are planning a produce collection and cold store depot in Port Moresby, which will have sorting, cleaning and packaging facilities.

“The pharmacy division will add new branches – a second outlet in Kokopo and a new outlet in the highlands region in 2012.

“The supermarket division is exploring an additional new outlet in Port Moresby and a major revamp of our biggest outlet in Waigani Drive.

“Our joint-venture operations of Hardware Haus continue to grow from strength-to-strength and we will see greater profits in 2012.

“We will continue exploring opportunities that the LNG project will bring.

“Our much-delayed cinema project has started successfully in February, and we are looking at additional sites in Port Moresby and around PNG.”