Companies / 23 September 2019, 2:30pm / Sandile Mchunu
DURBAN - Grand Parade Investments (GPI) aims to build on the solid performance laid by Burger King in the year ahead and expand the franchise after its largest food business exceeded R1billion revenue for the first time.
The group has concluded its restructuring process, which resulted in an improvement in most of its key financial indicators during the year to the end of June.
It said on Friday that it had achieved growth in Burger King by continuing to focus on growing market share by managing the menu pricing architecture to increase traffic through the stores.
The group opened 10 Burger King restaurants during the year and closed four unprofitable restaurants.
Chief executive Mohsin Tajbhai said the group wanted to build on this platform and was planning to open 12 new Burger King restaurants in the next financial year.
“We have made excellent progress in improving the overall profitability of the business and this will continue to be a strong focus, along with driving new restaurant growth in Burger King. We firmly believe that the value in GPI lies in unlocking the potential in Burger King, which has finally turned the corner,” Tajbhai said.
Burger King’s sales for the year increased by 34.2 percent to R1.02bn, with same-store sales up 10.3percent.
GPI’s revenue increased by 28 percent to R1.4bn.
In February, GPI decided to voluntarily liquidate Dunkin' Donuts and Baskin-Robbins. GPI said this was the fastest way to stem losses.
GPI saved R12million by liquidating the business in the past four months, although the company had to impair the businesses to the tune of R50m.
The group also entered into an agreement to sell 10percent of its equity in Spur back to Spur Corporation for R260m, which would be used to reduce debt.
The group said post the transaction the company would reduce its debt to earnings before interest, tax, depreciation and amortisation (Ebitda) to 1.3x, which is extremely favourable, particularly in these uncertain economic conditions.
The group reported a 308percent increase in net profit from continuing operations to R72.9m, while the net loss for the year was reduced to R36m compared with last year’s R49m.
The group also improved on last year’s 11.2cents headline loss a share to a headline earnings per share (Heps) of 9.7c.
Tajbhai said it had not been an easy journey for GPI in the past year as they navigated through an extremely challenging economic environment while addressing some of the fundamental issues in the businesses.
“The current executive team has done an incredible job in addressing these key issues which has resulted in an impressive set of results despite the difficult trading conditions. I am extremely proud of the team’s achievement in the last year,” he said.