Max’s marks return to profit

Casual dining chain operator Max’s Group Inc. has returned to profitability in the first quarter after it carried out a rationalization program in the aftermath of its consolidation with Pancake House Inc.

Net profit in the first quarter amounted to P140.2 million—a turnaround from a net loss of P23.8 million reported in the same period last year.

“We are now seeing the results of our transformative efforts in 2014. As we continue to rationalize operations across our stable of brands, we are determined to gain more ground and sustain this momentum moving forward,” said Max’s president and chief executive officer Robert Trota.

“The company continues to evaluate underperforming stores and streamline its base of operations, primarily in supply chain, marketing and support services,” Trota added. “While first quarter results reflect that we are already benefiting from these activities, we are still expecting to realize a sizeable portion of cost savings derived from operational efficiencies and synergies within the year.”

Seven stores had been shut down in the first quarter, bringing to 33 the total number of stores that the group had folded up. Seven more are set to be closed this year.

During the three-month period, the consolidated revenues of Max’s rose by 159 percent year-on-year to P2.4 billion. On a pro-forma basis, or assuming the consolidation for both periods, top-line growth came in 6 percent higher despite the planned closure of seven outlets during the period.

“It was a good start for how the year will unveil itself,” said Dave Fuentebella, chief finance officer of Max’s. “Our growth story is on track. Our store openings are on track.”

Store sales, which comprised the bulk of revenues, grew by 6 percent to P2.05 billion year-on-year. Franchise income likewise went up by 40 percent year-on-year to P91.93 million.

From January to April, the company opened 10 outlets including three overseas. The company opened a fourth Max’s Restaurant in the Middle East located in Al Ain, United Arab Emirates (UAE) and another in Ontario, Canada. Pancake House, on the other hand, now has eight stores in Malaysia.

As of April, the Max’s group had a total of 543 branches. For 2015, it plans to open 80 to 90 new branches, with half already primed in secured locations. It also intends to accelerate the rollout of these stores in the next quarter.