The Market Monitor Minding the Nation's Business
Listed restaurant chained Shakey’s Pizza Asia Ventures Inc. (PIZZA) posted a net income of P760 million for last year buoyed by stronger sales, an expanded store network, and improved profitability.
This includes net non-recurring income of P90.3 million, a product of a change in ownership early last year and a subsequent corporate restructuring and initial public offering during the second half.
Excluding one-offs, PIZZA’s recurring net income after taxes increased by 40 percent year-on-year to P670 million,equivalent to a bottom-line margin of 11 percent.
System-wide sales rose by 14.3 percent to P7.34 billion, driven by same store sales growth of 3.9 percent and increased contribution of new stores.
In the last twelve months, PIZZA added an additional 17 outlets, three more than the 14 opened the year before, ending 2016 with 184 local stores.
Recurring revenues, including those from an in-house commissary, grew by 14.7 percent to P6.01 billion.
Late last year, the company undertook a corporate restructuring, which included the acquisition by PIZZA of its commissary which supplies bakery products toShakey’s as well as other food service customers.
In 2016, PIZZA also saw profitability improve as margins for recurring gross profit and earnings before interest, taxes, depreciation, and amortization (EBITDA) expanded by 820 basis points (bps) to 31 percent and 320 bps to 19.7 percent, respectively.
The company attributed the profit growth to favorable commodity prices and purchasing synergies post consolidation into the Century Pacific Group (CPG).
CPG, parent company of Philippine-listed Century Pacific Food, and Singapore’s sovereign wealth fund concluded early last year a partnership to acquire majority of the pizza business from its previous owners.
Since then, recurring net income margins have also expanded by 200 bps.
PIZZA President Vicente Gregorio said the company’s industry leading performance is anchored on the superior value offering of Shakey’s, its strong management team, and a brand legacy that we have builtover a 40 year history.
Shakey’s, recognized globally as the original pizza franchise, was first established in the United States in 1954 and is best known for “the pizza that started it all”.
In 1975, it first opened in the Philippines where it currently maintains market leadership in both the full service and pizza chain categories.
“Our success is also driven by a mission to ‘Wow the Guest’, supplemented by excellent marketing initiatives and continued product innovation, which help consistently provide guests with a memorable dining experience,” said Gregorio.
“The first two months of this year have been very encouraging and we are optimistic that we will continue the strong performance into 2017,” he added.
This year, PIZZA is looking to roll out an additional 20 new stores. It hopes to end 2017 with a 204 store network, including its first ever branch overseas.
Apart from the Philippines, PIZZA also owns the perpetual rights to the Shakey’s brand for the Middle East, Asia (excluding Japan and Malaysia), China, Australia, and Oceania.
In the third quarter, it is set to open its first international store in Kuwait having just signed a development agreement with a franchisee committed to build at least 10 Shakey’s Pizza outlets in that area. RIZA LOZADA