Grand Parade Investments settles debt
The company said this had reduced its debt equity ratio from 27.1 percent to 16.5 percent.
Grand Parade sold its 10 percent stake in SunWest for R547.5 million and 19.9 percent in GPI slots for R262.1 million last year to concentrate on investing in restaurant businesses.
The group said its results for the six months to end-December clearly highlight a limited exit from its gaming and leisure investments and a continued investment into its food investments. The investment company also increased its overall holding in Spur Corporation, buying 1.6 million Spur shares for R52.7 million to take its overall holding in the franchise restaurant chain to 13.1 percent.
It continued with the expansion of its existing food investment portfolio, launching the Dunkin’ Donuts and Baskin-Robbins in the Western Cape.
“Both brands were received exceptionally well by the local consumers with sales in the first two months of trade exceeding the initial targets,” the company said.
“At December 31, Dunkin’ Donuts had opened five restaurants and Baskin- Robbins had opened two stores. A total of R13.7 million was spent on setting up and launching the brands, inclusive of franchise cost and licensing fees.”
The company said that Burger King South Africa was another success story during the period. It opened four new outlets and recorded a significant improvement in operating results with a 211percent increase in restaurant earnings before interest, tax, depreciation and amortisation (Ebitda).
“Having already achieved profitability at a company debit level and with 12 new drive-through restaurants in the pipeline, the expansion of the Burger King restaurant network will start gaining momentum over the next year, which will ensure that a bottom line profit is attained,” the group said.
It added that the introduction of Dunkin’ Donuts and Baskin-Robbins into the South African market also came as a huge success, charging that it was confident that the two could reach profitability over a much shorter time frame than Burger King.
“This will ensure that the earnings from food investments will replace the earnings of the gaming and leisure investments, which have recently been sold,” the company said.
GPI shares rose 1.97 percent on the JSE to close at R3.62.