GRAND PARADE INVESTMENTS
Share price: 370c JSE code: GPL
BUY GRAND PARADE INVESTMENTS (GPI) IS a longstanding empowerment company, and has more corporate mileage under its belt than the two other companies covered in this segment. Not only is GPI streetwise, but it has considerable financial muscle, in the form of a strategic holding in Sun International’s Western Cape assets, to underpin its forays into the fast food sector.
GPI’s thrust is led by its master franchise agreement for the Burger King brand, which, at the time of going to press, had reached 51 stores in the Western Cape, Gauteng and KwaZulu-Natal. Though the roll-out of Burger King outlets has been slower than expected, GPI’s determination to secure a fat (and sustainable) margin rather than chasing market share is commendable. More recently, GPI secured a licence for the Dunkin’ Donuts brand, a move that roughly coincided with the resignation of Burger King boss Jaye Sinclair. Some believe Sinclair’s departure may signal a more aggressive approach to GPI’s fast food roll-out and perhaps a willingness to work more closely with Spur Corporation, where the company holds a 10% stake. Reversing GPI’s fast food assets in Spur — in exchange for a bigger holding in an enlarged restaurant and fast food conglomerate — might make sense. GPI, though, would probably want to bulk up its fast food offering before engaging with Spur. It might not be far fetched for GPI to look for acquisitions of well established fast food brands. Worth a nibble.