SOUTH AFRICA – Grand Parade Investments (GPI), South Africa’s franchise operator of Burger King posted 13% increase in total headline earnings from continuing operations to US$2.46 million in the
The group, which in February this year announced the closure of Dunkin’ Donuts and Baskin-Robbins operated outlets, also saw its revenue grow 28% during the interim period despite tough trading conditions.
“The last year has been challenging for GPI and, in particular, its food businesses, which have been affected by tough economic conditions,” the group said
GPI managed to increase its interim headline earnings to US$1.11 million from US$0.97 million in the prior period which it said was largely driven by an increase in contributions from gaming and leisure assets.
The group said Burger King South Africa had managed to generate impressive top-line growth with a significant increase in revenue.
Despite its revenues increasing by more than a third, the American fast-food brand,
Burger King losses were said to have grew partly because of some underperforming restaurants.
It slowed down restaurant growth to focus on improving the profitability of its poor performing restaurants and marginally grew its net restaurant count by three restaurants, opening four new ones and closing one.
“Many of these restaurants have come to an end of their rental terms and it is the group’s intention to either renegotiate better rental terms or to relocate these restaurants in order to improve performance
The group has that whilst Burger King is still in its growth phase, the group will continue to adopt a conservative approach on its gearing to meet its master franchise obligations
While Burger King added only three outlets on a net basis in the period, management planned to grow the restaurant count by 15 stores a year over the next three years,” GPI said.
GPI is liquidating Dunkin’ Donuts and Baskin-Robbins due to their continued poor performance as part of a value-based strategy.
GPI said it remained focused on a tactical plan to improve operations which would continue to grow earnings over the next 6 months.