Shakey's income up despite more competitive scene
MANILA, Philippines – Listed Shakey's Pizza Asia Ventures Incorporated (SPAVI) saw its recurring net income for the 1st 9 months of 2017 increase by 15% to P519 million, thanks to a higher revenue base and improved operating profitability.
SPAVI told the Philippine Stock Exchange (PSE) on Tuesday, November 7, that its system-wide sales increased by 15% to P6 billion in the 9-month period, on the back of 6% growth in same store sales and opening of 16 new additional stores.
Its net revenues for the January to September period increased by 18% to P5 billion, from the P4.2 billion registered in the same period a year ago.
But for the 3rd quarter alone, SPAVI's recurring net income slightly dipped mainly due to interest expense incurred by the pizza chain since the middle of 2016, while revenues grew by 11% to P1.6 billion.
"We encountered a more competitive environment in the 3rd quarter, which is also typically the 2nd half's leaner period," SPAVI president and chief executive officer Vicente Gregorio said in the disclosure.
"We are confident however that with the various product and marketing initiatives implemented, we will see another round of good sales growth as we enter the Christmas season – historically the strongest part of the year," he added.
The Shakey's chief said the listed pizza chain remains on track to hit its 2017 target.
"For the last quarter, we expect seasonally strong revenues to translate to better profitability metrics as we spread costs over a much larger base," Gregorio said.
"We will also continue our efforts to monitor expenses closely as we start to feel the impact of higher raw material price and a weaker peso on our gross margin," he added.
As of end-September, SPAVI operates 200 stores in the Philippines. It expects to end 2017 with 207 stores – higher than its earlier target of 204.
Aside from the Philippines, SPAVI also owns the perpetual rights to the Shakey's brand for the Middle East, most of Asia, China, Australia, and Oceania.
It recently opened its 1st international store in Kuwait, having signed a development agreement for the construction of at least 10 Shakey’s outlets in the region within a span of 7 years.
It also recently signed another area development agreement to build at least 10 Shakey's Pizza outlets in the United Arab Emirates (UAE) over a span of 5 years.
Its 1st store in the UAE will be located in Dubai and is expected to be opened in the 1st half of 2018. – Rappler.com