Listed casual dining firm Max’s Group Inc. (MGI) said it plans to open 79 new stores next year both here and abroad after having raised P3.5 billion from a follow-on offering of 300 million shares on the stock market.
In a briefing on Friday, MGI president and chief executive officer Robert F. Trota said MGI will open 79 new Max’s stores next year — 68 stores here and 11 stores abroad. The group currently operates 48 local outlets and 18 stores overseas.
For the local expansion, the 68 additional stores to be completed next year will carry the Max’s restaurant brand. The 11 new stores abroad will consist of brands under Max’s chain — one each in the United States and Canada, two in Malaysia and five in the United Arab Emirates — as well as two Yellow Cab outlets in Hawaii and Saudi Arabia.
Trota said they intend to strengthen Max’s foothold in the Philippines while growing the other brands overseas, particularly Pancake House which they are targeting for the Southeast Asian market.
“We feel that the Asian market will be our better approach for Pancake and even Yellow Cab. Max’s is also there. We’ve been looking at Indonesia, we’re just assessing formats,” Trota said.
Pancake House has three existing stores in the Southeast Asian region: one in Brunei and two in Kuala Lumpur.
Trota said the international expansion will be made through franchising to have a “better grasp of the market.”
Dave Fuentebella, director and chief financial officer of MGI, said that the group is very positive about the casual dining industry and projects very good growth in the sector along with the positive growth story of the Philippines.
“We’re very optimistic about the industry. We have a base that’s rising. We have a lot of development that’s going up not only in the National Capital Region but also in Southern Luzon, Visayas and Mindanao,” Fuentebella said.
“We really feel that because the economy is trending upwards, it’s hitting the emerging middle class which is where we are strategically situated. The trend before is you have to be invited to a Max’s [restaurant]but now, you can eat there. We see a lot more people with spending power. A lot of people were going to the office with their baons [packed lunch], now we have a lot more people who just want to eat out,” he added.
The follow on-offer raised P3.5 billion, which will be used to pay off debts related to the group’s Pancake House acquisition while the remainder will go to expansion plans and general corporate purposes.
The follow-on offer involved 300.14 million common shares, priced at P17.75 per share.
The offer period was from December 1 to 5.
The company took out a P4.3-billion long-term loan with the Bank of the Philippine Islands (BPI) to acquire 233 million shares or 89.9-percent controlling stake in the former Pancake House Inc. (PHI). The loan has an interest rate of 5.5 percent per annum, due February 2021.
In February, Max’s Group completed its acquisition of the 82-percent stake held by the Martin Lorenzo Group in PHI as well as the more than 7-percent stake in PHI held by other subsidiaries. The group was consolidated into PHI, which later changed its name to MGI.
In the first nine months of the year, MGI managed to cut its net loss to P31.36 million from a net loss of P116.11 million last year as revenues went up slightly to P2.7 billion from P2.695 billion a year ago.
As of end-June, the group has a total of 498 restaurants in the Philippines and 27 outlets abroad. The group claims to have cornered a 28.3 percent average market share.
MGI’s 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, Jamba Juice and The Chicken Rice Shop.