GPI to take a big bite out of Burger King holding
GPI holds a 96percent stake in Burger King and it wants to reduce its holding to a minority stake.
GPI opened its first Burger King restaurant in the country in 2013.
“Shareholders are advised that the company has entered into negotiations in relation to a disposal of a material interest in Burger King SA, which, if successfully concluded, may have a material effect on the price of the company’s securities,” the company said. The Grand Parade shares declined to R3.54 a share yesterday morning from Tuesday’s closing price of R3.80, and closed 3.95 percent lower at R3.65 on the JSE yesterday.
The expected disposal of its stake in Burger King comes after the group reported an improved operational performance in its largest food business by exceeding R1billion in sales.
The surge was 34.2percent higher compared to the previous year for the first time in the year to end June as the group benefited from a restructuring process it embarked on last year.
Store sales in Burger King were up by 10.3percent.
In an earlier interview with Business Report, chief executive Mohsin Tajbhai said the group was planning to open 12 new Burger King restaurants in the next financial.
Tajbhai added that it had made excellent progress in improving the overall profitability of the business and this would continue to be a strong focus, along with driving new restaurant growth in Burger King.
Burger King opened 10 restaurants during the period and closed four non-performing stores.
In February, GPI closed down Dunkin Donuts and Baskin Robbins in South Africa due to poor performance.
The decision to liquidate the businesses came after they made sustained losses and the process of disposing them proved to be unsuccessful.