The country’s leading casual dining chain operator Max’s Group Inc. (MGI) grew net profit last year by 12 percent to P561.74 million as robust domestic consumer spending supported a double-digit expansion in restaurant sales.
In a disclosure to the Philippine Stock Exchange on Wednesday, MGI said systemwide sales had gone up by 12 percent to P15.34 billion for the year, in turn supporting a 10-percent growth in revenues to P11.44 billion.
“We are fairly upbeat with our full year performance. We were able to successfully execute our strategies amidst a rapidly intensifying competitive environment. Overall, it was another productive year for us,” MGI president Robert Trota said.
Restaurant sales increased by 10 percent to P9.42 billion from P8.59 billion as the group opened 77 new stores while same store sales performance was steady last year.
The rollout of 77 new stores last year – including 16 overseas branches – brought MGI’s total network count to 623 branches. Its overseas footprint now consists of 49 outlets The group sees itself on track to build a network of 1,000 outlets, including 200 international stores, by 2020.
Last year, MGI’s online and delivery revenues stood 24 percent higher at P1.08 billion, attributed to a centralized ordering and dispatch platform.
Commissary sales stood relatively flat at P1.26 billion from P1.28 billion owing to closures of certain franchised outlets.
Meanwhile, revenues from new franchises, royalty and continuing license fees rose by 54 percent to P766.72 million, driven by growing recurring income base and additional overseas franchise contracts.
Cost of sales improved to 72.2 percent for 2016 from 72.6 percent in the previous year. The company said it had mitigated pricing headwinds from rising input components with lower logistics and utility expenses.
Cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) ended the year at P1.47 billion.
MGI has budgeted around P750 million to P800 million in capital expenditure this year, largely for the rollout of another 60 to 70 new stores primarily among core brands Max’s Restaurant, Pancake House, Yellow Cab Pizza and Krispy Kreme.
On offshore business, MGI has a pipeline of over 140 overseas stores slated to open in the coming years. Last year, the MGI inked eight development agreements for at least 80 stores across various geographies. Among the notable markets penetrated for 2016 included Yellow Cab Pizza’s foray into China and Singapore.
“We remain bullish on the pace of our global business. Our focus this year is to boost recurring income by accelerating store development. Nonetheless, we shall constantly be on the lookout for fresh territories,” said Peter King, chief executive officer of Max’s Group International.
MGI also reported significant progress in “fortifying its support structure.” Last year, MGI invested in major enterprise resource systems to automate processes and harmonize procedures throughout the organization. At the senior management level, MGI hired key professionals to strengthen its existing talent roster. There are also initial plans to expand commissary capacity to reinforce future growth.
“We are confident in sustaining the same momentum moving into 2017. We firmly believe prevailing economic conditions will remain supportive of our business,“ Trota said.