The group said operating costs were up by 9percent to R677million from R623m last year.
Impairments and once-off costs rose to R102m during the period, up from R24m compared with last year, with R58m attributed to the food division and R44m to the luxury goods division. In addition Taste reported a once-off restructuring and retrenchment costs of R17m.
As a result, losses increased to R318.23m, up from last year's loss of R241.02m. “This increase resulted primarily from a deep dive into the business model and operating costs, which resulted in a restructure of the food division and corporate head office to position the group and its various brands for the future,” the group said.
Taste, which bought the rights to Starbucks and Domino’s Pizza in South Africa, admitted its failures of taking on too much by introducing two global brands and a centralised distribution system, while still bedding down its luxury goods division.
However, after repositioning Domino’s Pizza, rationalising Starbucks and restoring financial discipline, the business was confident that it was now positioned to drive top line growth and realise attractive margins going forward. During the year, Taste also concluded a R132m rights offer to fund the expansion.
Taste made a change in its executive team by appointing a new chief executive in Tyrone Moodley and chief operating officer Dylan Pienaar at the beginning of the financial year, tasked with leading a turnaround strategy for the group.
With the new team in charge and restructuring completed, the group looks to the future with renewed confidence as it seeks to restore shareholder value.
In the results, revenue declined by 7percent to R960m, driven by a 12percent reduction in luxury goods sales and a 1percent reduction in food sales, while diluted loss a share came in at 35c a share. The group did not declare a dividend.
In the food division, revenue decreased by 1percent to R470m as sales were under pressure, with a number of store closures across the brands. The luxury goods division reported a 12percent decline in revenue to R490m. “Luxury goods are cyclical and negatively influenced by macroeconomic uncertainty in the country, relative rand strength and disposable income which all impact on revenue,” the group said.
The group said it had no long-term debt. “Increases in borrowings were derived mainly from the bridging facility received from RVF, our major shareholder, while the rights offer process was in progress,” the group said.