Grand Parade stock takes a beating after heavy losses
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 SunWest 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.