CASUAL dining chain operator Max’s Group Inc. (MGI) reported profit growth of 3 percent in the first nine months of the year driven by higher store and commissary sales and new stores opened.
On Friday, MGI said its January to September net income grew to P380.56 million from P368.86 million in the same period last year while total revenues increased by 11 percent to P8.09 billion from P7.3 billion previously.
Revenue expansion was attributed to strong system-wide sales, which rose 12 percent to P11.09 billion from P9.87 billion in the same period last year.
System-wide sales refer to overall sales from both company owned and franchised stores.
“The third quarter is normally our lean period owing to the wet climate and other cyclical factors. Nonetheless, the historical slowdown should reverse ushering into the Christmas season,” said Robert F. Trota, MGI president and chief executive officer.
Restaurant sales improved by 8 percent to P6.72 billion from P6.20 billion, with 22 new stores opened from July to September and steady earnings from existing stores.
Commissary sales climbed 19 percent year-on-year to P971.03 million while revenue from store franchises, royalties and continuing license fees climbed by 39 percent to P399.87 million.
The company said there are plans to shift to quicker formats for certain brands to benefit from higher volume turnover and lower fixed overhead.
As of end-September, Max’s Group has rolled out 55 new stores including 11 international branches, bringing its overall count to 611 stores, with 44 located abroad.
For its international ventures, MGI continues to convert its existing development pipeline of 91 outlets into physical stores. During the third quarter alone, it unveiled flagship stores for Yellow Cab Pizza in Beijing and Changsha Province in China, as well as Sizzlin’ Steak in Vietnam.
“From securing territories, focus is now centered on store building activities to boost our recurring income base. In the same way, we remain in pursuit of leads into other markets,” said Peter H. King, chief executive officer of Max’s Group International.
The company recently invested in an information system that is human resources-centric to manage its people-related processes and requirements in order to maximize productivity across the business.
“For the remaining months of 2016, we expect the prevailing economic environment to sustain its positive trend. We will open another 20-30 stores to close the year, putting ourselves in a strong position to meet Yuletide demand,” Trota said.
The company has a five-year target of 70 to 80 store openings which will require capital expenditure of P700 million to P800 million yearly from 2016 to 2020.
MGI’s restaurant brands are present in Vietnam, Malaysia, Brunei and the Philippines for Southeast Asia, Saudi Arabia and Qatar for the Gulf estates, as well as North America.
Max’s Group is a casual dining chain operator and its portfolio of restaurants include: Max’s Restaurant, Pancake House, Yellow Cab, Dencio’s, Kabisera ng Dencio’s, Teriyaki Boy, Max’s Corner Bakery, Maple, Sizzlin’ Steak and Le Coeur de France, as well as international brands Krispy Kreme and Jamba Juice.