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Shakey’s slices out P519M recurring gains

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By James Loyola

Shakey’s Pizza Asia Ventures Inc., the Philippines’ leading chained full-service restaurant, delivered 15 percent growth in recurring net income to P519 million for the first nine months of 2017.

In a disclosure to the Philippine Stock Exchange, the firm said the growth came primarily on the back of a bigger revenue base and improved operating profitability. It did not disclose its net income including one-off items.

Shakey’s Pizza Asia Ventures (Photo courtesy of shakeyspizza.ph)

Credit: shakeyspizza.ph / MANILA BULLETIN

“We encountered a more competitive environment in the third quarter, which is also typically the second half’s leaner period,” said Vicente Gregorio, President and CEO of PIZZA.

He added that, “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.”

System wide sales rose by 15 percent to P6.0 billion, driven by same store sales growth of 6 percent and an expanding local store network.

Since the start of the year, Shakey’s has added 16 new outlets, ending September 2017 with a Philippine store network of 200. It expects to end the year with 207 stores in the Philippines, ahead of its earlier target of 204.

All in all, net revenues for the nine-month period grew by 18 percent to P5.0 billion versus the P4.2 billion during the comparable period last year. For the third quarter alone, revenues grew by 11 percent to P1.6 billion.

In terms of margins, that of recurring net income slightly dipped to 10.4 percent due primarily to interest expense incurred by the Company beginning middle of 2016.

However, focusing on operations alone, Shakey’s said it was able to improve profitability with operating profit and adjusted EBITDA margins expanding by 210 bps and 120 bps respectively versus the same period last year.

These were attributed to synergies implemented post acquisition by the Century Pacific Group, as well as various price increases and operating efficiencies in anticipation of higher input costs.

“For the last quarter, we expect seasonally strong revenues to translate to better profitability metrics as we spread costs over a much larger base. 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,” said Gregorio.

He noted that, “nevertheless, we remain on track towards hitting our full year targets and now look forward to a good start for 2018.”(James A. Loyola)

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