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The country’s leading pizza parlor chain Shakey’s Pizza Asia Ventures Inc. (SPAVI) grew its net profit last year by 58 percent to P760 million on stronger sales, improved margins and expanded store network.
This includes a net non-recurring income of P90.3 million arising from a change in ownership early last year alongside a subsequent corporate restructuring and initial public offering during the second half of last year. Excluding extraordinary items, SPAVI’s net profit last year amounted to P670 million, rising by 40 percent from the previous year.
System-wide sales rose by 14.3 percent to P7.34 billion as the restaurant chain grew sales from the existing network by 3.9 percent while newly opened stores also contributed earnings.
In the last twelve months, SPAVI added additional 17 outlets compared to 14 opened the year before, ending 2016 with a network 184 stores. Same store sales excluded the impact of newly-opened stores for better comparison with the previous year’s numbers.
SPAVI reported that recurring revenues last year, including those from generated from an in-house commissary, had increased by 14.7 percent to P6.01 billion. Late last year, a corporate restructuring took place, which included the company’s acquisition of its commissary which supplies bakery products to Shakey’s as well as other food service customers.
In 2016, SPAVI also reported an improvement in profitability as margins for recurring gross profit and earnings before interest, taxes, depreciation and amortization (EBITDA) expanded by 820 basis points to 31 percent and 320 basis points to 19.7 percent, respectively.
The company attributed SPAVI’s growth to favorable commodity prices and purchasing synergies in the aftermath of its consolidation into the Century Pacific Group (CPG), which is led by the Po family. CPG is the parent company of leading canned food manufacturer Century Pacific Food.
CPG and Singapore’s sovereign wealth fund concluded early last year a partnership to acquire majority of the pizza business from its previous controlling stockholders led by the Prieto family. SPAVI also debuted on the stock exchange late last year under the ticker PIZZA.
Since taking over the pizza chain, the company reported that recurring net income margins have expanded by 200 basis points.
“Our industry leading performance is anchored on the superior value offering of Shakey’s, its strong management team, and a brand legacy that we have built over a 40-year history here,” SPAVI president Vicente Gregorio said.
Shakey’s, recognized globally as the original pizza franchise, was first established in the United States in 1954 and is best known for “the pizza that started it all”. In 1975, it first opened in the Philippines where it currently maintains market leadership in both the full service and pizza chain categories.
“Our success is also driven by a mission to ‘wow the guest’, supplemented by excellent marketing initiatives and continued product innovation, which help consistently provide guests with a memorable dining experience,” said Gregorio.
This 2017, Gregorio said the first two months had been very encouraging, adding the group was optimistic the strong performance would continue for the rest of the year.
This year, PIZZA is looking to roll out an additional 20 new stores and is hoping to end the year with a 204-store network, including its first ever branch overseas.
Apart from the Philippines, SPAVI also owns the perpetual rights to the Shakey’s brand for the Middle East and Asia (excluding Japan and Malaysia), China, Australia, and Oceania. In the third quarter, it is set to open its first international store in Kuwait after signing a development agreement with a franchisee that is committed to build at least 10 Shakey’s Pizza outlets in this territory.