Phil-Seven Corp., the Philippine franchise holder for the 7-Eleven chain of convenience stores, is setting aside over P300 million for the establishment of new branches and the refurbishment of existing ones in line with efforts to further cement its dominant foothold in the competitive industry.

Phil-Seven president Jose Victor Paterno said the company is hoping to end the year with a total of 70 new branches, 24 of which had already opened.

The new branches, which will be 50-percent franchised and 50 percent company-owned will be located in and outside Metro Manila. Each store is estimated to cost about P4.5 million.

Last year, the company opened a total of 287 stores compared with only 265 in 2005.

Paterno said they are studying the feasibility of putting up branches in Visayas and Mindanao.

For next year, Phil-Seven will be more aggressive as it aims to put up 80 new stores across the country.

Paterno said the company has lined up more programs to boost its sales margin and customer count in partnership with suppliers.

Phil-Seven reported a 43 percent rise in the net income last year to P20 million from only P14 million in 2005, largely due to top-line growth and underlying store profitability.

Consolidated revenues slightly increased to P4.63 billion as conversion of stores from corporate to franchise operated stores resulted in lower aggregate growth rate of one percent in 2006, compared to 16 percent a year earlier.

As of end-2006, the aggregate number of franchised stores reached 120, accounting for 42 percent to total operating stores, compared to only 32 percent in 2005 and 20 percent in 2004.

Although aggregate sales increased, average monthly store sales dropped three percent. Moreover, customer count dipped four percent per store per month, lower by 12 percentage points compared to that in 2004, as the implementation of the expanded value-added tax affected the purchasing power of the company’s end-customers.

Products in the service category, which form part of the company’s commission income, are pre-paid cards, e-pins and bills payment. Commission income amounted to P28.6 million, down 24 percent from the previous year. The drop was brought about by the proliferation of retailers offering similar products and lower denomination e-pins. The increasing number of post-paid account subscribers due to various premium offers of telecommunication companies aggravated the downtrend.