Market Event

JFC plans to expand in Europe “by growing to 50 stores” in the next five years, after seeing a positive debut in Rome, Liverpool, and Leicester City in the previous year despite the pandemic.

Opinion

JFC is planning to spend 50 Million GBP or P3.4 Billion for its 5-year expansion in Europe, which also includes investing in contactless kiosks and a mobile app to adapt to the new normal. With regard to this, we note that JFC’s full-year 2020 (FY20) cash position stood healthy at P21 Billion, with net D/E relatively stable at 0.6x compared to 0.4x in 2019.

While the expansion in Europe will generate positive sentiment for JFC, the 50 stores would only account for 1% of JFC’s total store network. Recovery of JFC will largely depend on the turnaround of CBTL, which management expects to generate profits by yearend, as well as the pace of the vaccine rollout in the Philippines as it accounts for 55% of store network (ex-CBTL).

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