GPI warns of losses from Dunkin’ Donuts and Baskin-Robbins
LISTED Grand Parade Investment (GPI) yesterday warned investors that it would report a loss of between 7.94 cents and 8.52c a share for the six months to end-December on the back of offloading its loss-making Dunkin’ Donuts and Baskin-Robbins units.
The group said the impairment of Dunkin’ Donuts and Baskin-Robbins, which were liquidated after December last year and reported as part of discontinued operations, would affect its basic earnings per share.
GPI said the losses on the discontinued operations were expected to widen to between 8.1 percent and 28.1 percent, or between 4.38c and 5.19c, compared with last year’s loss of 4.05c.
Last year, the group reported earnings per share of 2.92c.
GPI said, however, that it expected a better performance from its headline earnings per share (Heps) from continuing operations. It said Heps would increase to between 7.7 percent and 27.7 percent, or between 7.81c and 9.26c, from last year’s 7.25c.
GPI shares closed unchanged at R2.65 yesterday.
GPI is an empowerment company, with holdings in the food and gaming sectors. The company was founded in 1997 for the principle purpose of partnering with Sun International as its primary black economic empowerment partner in the Western Cape.
Last month, the group announced it was exiting the poorly performing Dunkin’ Donuts and Baskin-Robbins as part of its value-based strategy, which aims at improving the group’s capital allocation.
In the year to the end of June last year, the group reported a loss of R48.02 million, largely due to Dunkin’ Donuts, including the Bakery and Baskin-Robbins, which collectively contributed a R62.9m headline loss before taxation.
The group said losses at its Burger King division narrowed to R11.5m from R29.7m a year earlier.
However, SunWest and Sun Slots contributed positively to headline earnings, with a collective increase of 14 percent, or R14.1m, but this was offset by a decline of 23 percent, or R0.7m, in Worcester Casino.
At the end of January, the group appointed Mohsin Tajbhai as acting chief executive as part of its strategy to shore up confidence in the business.
Tajbhai, who is also the group’s chief operations officer, said GPI would focus on improving corporate governance, communicating its strategy and its non-profitable foods business.
Grand Parade will release its full results next week.