Despite an economic slowdown in 2013, homegrown retailer City Pharmacy Ltd (CPL) Group, PNG’s biggest retailing network, managed to successfully retain its market share to protect its revenues by registering a sales growth of 9% from K357.21 million in 2012 to K388.72 million in 2013. CPL Group’s share price also traded strongly and showed an appreciation of 26% from K1.55 in December 2012 to K1.96 in December 2013. This is according to the Chairman’s Statement of CPL Chairman Mahesh Patel, OBE.
Though their retail suppliers suffered de-growth in double digit nationally in 2013 due to economic slowdown, lower commodity prices, etc., CPL Group is still confident that the market is going to pick up in the later part of 2014. Thus, they will be opening their most ambitious project to date – a new shopping complex named Waigani Central to open by this month-end which will house their retail brands namely City Pharmacy, Stop N Shop, Paradise Cinema and a new Do-It-Yourself style concept store to be called Haus Depot.
Among the highlights of CPL in 2013 are as follows: the launch of Eagle Boys Pizza in 3rd quarter of 2013 which has now given CPL the entry into QSR (Quick Service Restaurant) business; the expansion of their Distribution Center from 5,000 square meters to more than 9,000 square meters; the opening of their Stop N Shop Express store at the Airways Hotel complex which have proven to be a very successful retail format; the continuation of their IGA Retail Training Program which saw two of their Supermarket Store Managers travel to USA for further retail training; investment in Human Resources with specialized training in Pharmacy Division in Australia; store training and merchandising for some Hardware Haus personnel in USA in readiness of their new Do-It-Yourself style concept store in the new Waigani Central by Q2 of 2014; the “Best Private Sector Employer” award given by PNG Human Resource Institute; the “Most Innovative Company of the Year” award as voted by PNG Institute of Directors; their sponsorship of Ginigoada Business Foundation’s financial literacy program which saw 1,591 grassroots people graduate from various settlements and the championship of Stop N Shop Port Moresby Vipers in 2013 Digicel Cup.
Though there was a 9% increase in sales growth, the net profit before tax dropped by 12.25% to K23.89 million from K27.26 million due to the following factors: the launch of Eagle Boys Pizza in Q3 did not reflect a full year’s trading, thus showing a loss; Hardware Haus recorded a loss for the first time, due to poor management practices which prompted CPL to step in and take ownership of the management since the start of 2014.
In terms of share price, CPL stocks traded strongly last year. The shares were trading at K1.55 in December 2012 and closed at K1.96 in December 2013, showing an appreciation of 26%
A dividend of 7 toea per share has been proposed and after approval of the Annual General Meeting on April 28 will be paid in equal tranches in May and August 2014. The board keeping good governance in mind has recommended a dividend of 7 toea per share. This maintains the practice of distributing 50% of after tax profit. In 2013, a 7 toea dividend was also paid.
For 2014, Mahesh said CPL is committed to a program of continuous improvement that will ensure that they extend the leadership position in all of the categories in which they are represented. There will be an additional two (2) Eagle Boys outlets to be opened; the successful convenience store format of Stop N Shop Express will be replicated to other sites; a more efficient Supply Chain with the extension of their Distribution Center; an online e-commerce platform of their Sydney-based business Pharmacy Wholesalers Ltd.; continuation of their medium to long term position during the year though capital investments in their core business which is budgeted at K14.17 million and refurbishment of City Pharmacy stores around the country as well as scouting at new sites for opportunities.
He also acknowledged the continuing huge contributions of their 2,224 staff members across all operations during a challenging year. Says Mahesh, “Their commitment, enthusiasm and hard work are the basis of the success of CPL over the years.”
CPL Group is PNG’s biggest retailing network. To its credit, CPL Group has now established seven (7) strong retail brands namely CITY PHARMACY, STOP N SHOP, HARDWARE HAUS, BONCAFE, HOMEMAKER, PARADISE CINEMA and EAGLE BOYS PIZZA. As of year 2013, the CPL Group has a combined retail operations of 59 stores nationwide and employs more than 2,000 staffs of which 95 percent are Papua New Guineans. Its retail network spans health and beauty chains, grocery, hardware stores, coffee shops, multiplex cinema and a pizza chain.