Fruitas Holdings has fortified its financial position using proceeds from its initial public offering (IPO). Estimated net proceeds from the sale of new shares of approximately P820 million will boost its cash balances and cut its debt levels.

On a pro forma basis and based on its latest audited financial statements as of 30 June 2019, consolidated cash balance exceeded P1bn immediately post-IPO. Even after the planned debt repayment of P150m, pro forma cash balance of approximately P850m will far exceed the notes payable balance, which is expected to be halved from around P409m to just above P200 million by end of the year, using IPO proceeds and internally generated cash.

“We expect that our liabilities-to-equity ratio to improve from 1.6x as of June 30, 2019, to below 0.5x by end of the year. In addition, our cash reserves place us in a very strong position to take advantage of the significant growth opportunities that are presented to us,” Fruitas Holdings Director and Chief Financial Adviser Calvin Chua said.

Fruitas also highlighted the growth momentum that it has generated in the past years. “While we have nearly quadrupled our store network from 260 as of end-2015 to 1,036 just before our listing, we believe there is still significant potential for expansion for both our leader and challenger brands. Our revenue growth of above 20 percent growth in the first half of the year is expected to be sustained until end of the year,” Chua added.

Fruitas’ highly scalable business model and strong revenue growth differentiate it from other listed foodservice peers in the Philippine Stock Exchange which have only registered single-digit percentage revenue growth for the first nine months of 2019 due to various factors according to their respective interim financial statements.