After pizza, Shakey’s wants bigger slice of the food pie
Po family-led Shakey’s Pizza Asia Ventures Inc. (Spavi) is preparing to evolve into a multibrand restaurant operator by amending its charter to allow the acquisition of other dining outlets beyond flagship pizza parlor Shakey’s.
Spavi could grow organically with just the Shakey’s brand, adding 18 to 20 new stores every year in the next three to five years, but “another brand can come into the fold, so that immediately will be a big plus,” company president and CEO Vicente Gregorio said in a press briefing after the stockholders meeting on Thursday.
“We foresee having a portfolio of complementing brands that have the ability to grow and are scalable and (having) just the right number of brands,” he said.
Shareholders approved the change in the articles of incorporation that previously stated the operation of only the Shakey’s brand as its primary business. The new charter, which is still subject to approval by the Securities and Exchange Commission, gives Spavi the flexibility to acquire, operate and franchise other brands.
“We receive a lot of offers but we want to do it carefully. We want to do it right,” Gregorio said.
“Offhand, for a single brand, we continue to show very good growth in sales and we think this can be sustained in a year or two easily. But the acquisition plans can come in time on the basis that we do have a very nice target and if done right, then the financial feasibility seems to be of less risk,” he said.
Spavi, which trades as “PIZZA” on the local stock exchange, operates 217 Shakey’s stores, nine of which opened in the first half. The country’s leading pizza parlor chain, which is also the country’s single-largest restaurant brand with an estimated market share of 26 percent, expects to end the year with 228 stores.
For the whole of 2018, Spavi expects to post a low double-digit growth in net profit. This suggests that business will grow faster in the second half, as the company’s net profit grew by only 7 percent year-on-year in the first semester to reach P725 million.
The company encountered margin pressures in the first semester due to rising raw material costs but historically, the second half provides a breather.
“We’re not overly alarmed yet because we have scheduled to increase the price in the second half and the market, we believe, is able to absorb such price and the (operating) efficiencies we are working on will help improve our margins,” Gregorio said. Spavi expects to implement an average price increase of 1-2 percent this second semester, following a 3-4 percent increase in March.