Nompumelelo Magwaza
GRAND Parade Investment’s (GPI) strategy over the next five years included becoming a pure investment company with a focus on infrastructure and oil and gas industries among others, the group’s chief executive Alan Keet said yesterday.
The group, which has gaming and food service interests, said it had spent the past six months realigning the head office structure with that of an investment holding company.
“Our strategy is to be an investment company and we are quite happy to sell down.”
The group still has a number of investments that require operational involvement by GPI management, especially Burger King, Grand Sport, GPI Properties and Grand Technology.
“A strategy has been implemented for each of these investments to ensure that over the short term the GPI executive team is not involved with the day-to-day operations of these companies, with their contribution to each investment happening at a strategic level only,” the group said in a statement.
Keet said GPI was not desperate to get rid of anything it owned. However, there were a couple of things that the company was still too involved with, he said, referring to its small IT business, which services the group.
“We still need to find a home for that. We also have our sporting division where we are looking at a possible restructuring,” he added
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“In five years time, we will have a handful of investments, maybe five or six investments, with a small focused team at GPI monitoring those investments. We will also look at other industries such as infrastructure and related industries, as well as the energy industry.”
GPI has been quite active during the past six months. It sold 25.1 percent of the company’s casino slots to Sun International. In addition, it made three significant acquisitions, including the purchase of a further 42.8 percent of Mac Brothers Catering Equipment for R42.8 million. GPI now owns 100 percent of the company.
It also bought a 10 percent stake in Spur Corporation and a 51 percent stake in Grand Tellumat Manufacturing.
Results
For the six months to December, the group’s revenue was up R237.2m from R48.1m in the previous period. Gross profits rose R113.9m from R20.9m in the previous period.
Keet said GPI was happy with the roll-out of Burger King stores. “We are happy with the profitability of the consolidated stores.”
GPI had said that it would slow down the Burger King store roll-out to make sure that the existing stores were profitable. “At the end of December the stores were profitable. What this means is that each store that we add on, should generate its own cash and by the end of June Burger King would be self sustaining.”
Keet said GPI had invested about R360m in the rolling-out of Burger King stores, including operating 34 stores.
The group would have spent just under R500m by the end of June, with about 60 stores up and running, Keet said.
Burger King generated a total revenue of R134.9m, which was 248 percent higher than last year, at an average monthly revenue per store of R1.1m.
GPI’s stock closed up 2.13 percent at R6.23 yesterday.