Max’s earnings up 12% on higher systemwide sales
MAX’S GROUP, Inc. registered 12% more earnings last year, as it focused on boosting its recurring income by opening more stores within and outside the country.
The listed company on Wednesday disclosed its net income grew to P561.7 million from the P501.4 million booked for 2015, following a 12% increase in systemwide sales to P15.34 billion from P13.72 billion and a subsequent 10% rise in revenues to P11.44 billion from P10.37 billion.
Restaurant sales across the group increased 10% to P9.42 billion from P8.59 billion amid the opening of more stores, while revenues from online and delivery services surged 24% to P1.08 billion from P875.2 million.
Revenues from new franchises, royalty and continuing license fees also jumped 54% to P766.7 million from P497.5 million, as Max’s Group expanded its recurring income base and signed more franchise contracts overseas.
The closure of certain franchised outlets, however, kept the company’s commissary sales flattish at P1.26 billion. This compares with the P1.28 billion recorded for 2015.
Aside from expanding its revenue streams, Max’s Group managed to improve its financial performance by mitigating pricing headwinds from rising input components with lower logistics and utility expenses.
“We are fairly upbeat with our full year performance. We were able to successfully execute our strategies amidst a rapidly intensifying competitive environment,” Max’s Group President and Chief Executive Officer Robert F. Trota said in the statement.
In 2016, the company opened 77 outlets, including 16 overseas, and subsequently expanded its store network to 623 branches, including 49 operating abroad. It has targeted to have a total of 1,000 outlets, including 200 outside the country, toward 2020.
For this year, Max’s Group programmed about P750 million to P800 million in capital expenditure, largely to open 60-70 more stores under its core brands Max’s Restaurant, Pancake House, Yellow Cab Pizza and Krispy Kreme.
“We remain bullish on the pace of our global business,” Max’s Group International Chief Executive Officer Peter H. King said in the statement.
“Our focus this year is to boost recurring income by accelerating store development. Nonetheless, we shall constantly be on the lookout for fresh territories,” Mr. King added.
Offshore, the company lined up more than 140 stores for the coming years. It has secured eight development agreements for at least 80 stores across various territories in 2016, when it managed to bring Yellow Cab Pizza in China and Singapore.
Last month, Max’s Group announced another development agreement, this time with Blue Star Food Corp., to introduce the Yellow Cab to Vietnam. It agreed to open at least 12 outlets of the homegrown pizza dining concept in the Southeast Asian market within a five-year period.
“We are confident in sustaining the same momentum moving into 2017. We firmly believe prevailing economic conditions will remain supportive of our business,” Mr. Trota said.
Shares in Max’s Group closed flat at P27 apiece on the Philippine Stock Exchange on Wednesday, while the local market traded downward ahead of the Federal Reserve’s anticipated decision to hike interest rates again.