CAPE TOWN – Grand Parade Investments (GPI) has ushered in a new acting chief executive, Mohsin Tajbhai, as it tries to shore up confidence in the listed empowerment company after a bitter boardroom battle and a return to profit.
GPI, which has holdings in the food and gaming sectors and a main focus on Burger King, also holds master franchise licences in South Africa for Dunkin’ Donuts, Spur Corporation and Baskin-Robbins.
The company on Tuesday announced that Tajbhai, its chief operations officer, had been appointed acting chief executive with immediate effect.
Tajbhai said some of the issues the company would be looking at improving included corporate governance, executive remuneration, communicating its strategy and its non-profitable foods business.
He said this tactical plan would take the company until June or until the end of the year to implement.
“In the tactical phase, I’ve got several different objectives that we need to see out,” Tajbhai said.
These included looking at exiting some of the firm’s non-profitable businesses, such as Dunkin’ Donuts and Baskin-Robbins, which have not performed well in the past or achieved the expected returns, he said.
“We want to get rid of those businesses. We are also looking to restructure our central head office so that we can reduce central operating costs, which will improve efficiencies,” he said.
Tajbhai said within Burger King, the firm had identified that it needed to maintain the exclusivity of the brand by achieving a net restaurant target growth of only five.
“We are looking at all of the stores that are coming up for renewal and depending on the profitability of the store, either closing them or looking at how we can improve the revenue.
“We will be closing the very unprofitable stores, but will be doing it in such a way that there is no expense.
“We will either relocate those stores or re-use the equipment in other stores, so there is no real cost to the group. But we will be cleaning up our portfolio of stores so that every store is profitable.
“Then we will improve the overall Ebitda of the business moving forward and make the business a lot more efficient,” he said.
Tajbhai said the GPI group would be doing this while opening up better stores and not just “cleaning up”.
“We are cleaning up as well as growing. For the next financial year we have 14 stores planned, but will be closing down some unprofitable stores,” he said.
Tajbhai said this process would not lead to any job losses, but staff would be shifted to profitable stores.
GPI was embroiled in a boardroom battle last year, with activist shareholders calling for a shake-up of the board of directors and better corporate governance amid a spate of executive departures that saw three chief executives depart in less than two years.