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Burger King makes further losses for Grand Parade Investments

1 Sep 2015

Grand Parade Investments (GPL‚ GPI) on Tuesday, 1 September 2015, said its fledgling Burger King fast food franchise had made a loss for the second consecutive year‚ but this was in line with management expectations.

Burger King makes further losses for Grand Parade Investments

Burger King contributed a loss of R55.1m in the year ended June 2015 to the group headline earnings‚ which was 38.2% higher than the loss made in the year-earlier period.

"Burger King opened a further 26 stores during the year‚ taking its total number of stores‚ at 30 June 2015‚ to 44. In addition‚ Burger King achieved significant operational milestones during the year by localising 92% of its food inputs‚ which has significantly de-risked the business from currency fluctuations‚ stock losses and increased the food margin.

"The store operating costs were brought in line with targets that allowed Burger King to report a store operating profit of R3.7m between 1 April 2015 and 30 June 2015‚" GPI said.

GPI is a Western Cape-based‚ black owned and controlled holding company. It has interests in gaming and food services.

In the period under review‚ group headline earnings per share (HEPS) grew 232.2% to 10.53c‚ while revenue from continuing operations increased to R502m from R134.9m in the year-earlier period.

The investment firm declared a final dividend of 20c per share.

Looking ahead‚ the company said it expected to continue to grow despite the current squeeze on the South African consumer.

"GPI will unlock the potential of its sports betting and gaming machine manufacturing investments. The focus will remain on the expansion of Burger King to ensure that it reaches its critical mass during the upcoming year‚ which will allow the investment to sustain its expansion without the support of GPI.

"GPI's current portfolio of investments underpins the group's strategy‚ inasmuch as there is diversification across sectors and maturity of investments. This diversification allows for both growth and cash flows to continue to pay annual dividends on a sustainable basis‚" the company said.

In the past year‚ the share has fallen by a little more than 14%. This time last year‚ shares were trading at R6.35.

At 9.16am‚ GPI was down 1.09% at R5.45‚ valuing the company at about R2.7bn.

Source: BDpro via I-Net Bridge

Source: I-Net Bridge

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