Grand Pa­rade stock takes a beat­ing af­ter heavy losses

Pretoria News - - NEWS - Sandile Mchunu

GRAND Pa­rade In­vest­ments share price shed as much as 11.57 per­cent on the JSE af­ter the group suf­fered heavy losses for the year to end June.

This came af­ter the in­vest­ment and em­pow­er­ment group re­ported that its head­line loss per share was 4.59 cents, a 331 per­cent de­cline from head­line earn­ings of 1.99c a share com­pared to last year.

As a re­sult the share price de­clined to R2.42 a share on the early trade, but later closed at R2.50.

The con­sumer spend­ing was sub­dued dur­ing the pe­riod and this led to the food port­fo­lio go­ing through some dif­fi­cul­ties. Burger King de­creased its losses from R29.94 mil­lion a year be­fore to R10.93m. But Dunkin’ Donuts widened its losses to R22.25m, up from R3.71m a year ago.

How­ever, the group said it would con­tinue de­liv­er­ing on its strat­egy to grow its food busi­ness, which in­cludes the con­tin­ued im­prove­ment in the prof­itabil­ity of Burger King, roll out of both Dunkin’ Donuts and Baskin-Rob­bins and un­lock­ing the syn­er­gies be­tween the var­i­ous food in­vest­ments.

In the re­sults, rev­enue in­creased by 25 per­cent to R962m, up from R772m re­ported last year.

But the head­line loss was R20.12m, more than dou­ble the pre­vi­ous year’s R9.28m. In­trin­sic net as­set value per share rose by 2.5 per­cent and gear­ing was re­duced to 16.8 per­cent from 27.1 per­cent.

“Con­sumer spend­ing will con­tinue to be strained in the short to medium term due to the im­pact of the down­grades start­ing to neg­a­tively af­fect food and fuel prices through higher in­fla­tion and im­port costs,” the group said.

Dur­ing the year the group con­tin­ued to re­struc­ture its in­vest­ment port­fo­lio in line with its strat­egy of in­creas­ing its in­vest­ments in food, mov­ing to­wards strate­gic in­vest­ments in gam­ing and leisure and com­pletely di­vest­ing from its non-core in­vest­ments.

Agree­ment

It en­tered into an agree­ment to dis­pose of the Mac Broth­ers prop­er­ties lo­cated in Ep­ping and Sebenza. “Both prop­er­ties were sold for a to­tal con­sid­er­a­tion of R59.5m and its prop­erty sit­u­ated in At­lantis for R35m,” the group said.

It also dis­posed 10 per­cent of Sun West and Worces­ter and Tsogo had agreed to pay a to­tal of R675m for the in­vest­ments by way of an up­front pay­ment of R112.5m and the bal­ance by way of 15 equal monthly in­stal­ments of R37.5m end­ing Septem­ber 2017. It added that it was com­mit­ted to re­main­ing div­i­dend ac­tive.

“Any dis­tri­bu­tion re­lat­ing to 2017 prof­its will be con­sid­ered once fu­ture cash flows can be de­ter­mined with more cer­tainty,” the group said.

PHOTO: REUTERS

Dunkin’ Donuts widended its losses to R22.25m from R3.71m a year ago.

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