Max’s Group Inc. (MGI) reported on Friday more than a fourfold increase in its first-quarter net income this year as a result of strong sales in accordance with targets and on the back of store expansion.
MGI Chief Financial Officer (CFO) Dave Fuentebella said net income soared 372 percent to P140.2 million from a net loss of P23.8 million for the same period last year.
“Our growth story and store openings are on track. We grew this year in accordance with our targets despite some stores that were subject to closures. Even our pro-forma figure is 6-percent up, so we think that’s a good sign for our business,” Fuentebella told reporters.
Consolidated revenues surged 159 percent to P2.4 billion. On a pro-forma basis, revenues increased by 6 percent on the back of store expansions during the period.
The pro-forma figure is MGI’s consolidated full–year performance. MGI consolidated its portfolio of stores in the latter part of 2014 after it acquired Pancake House Inc. in February 2014 and later conducted a P3.5-billion follow on offering in December last year as a part of the group’s backdoor listing on the stock exchange.
Fuentebella said store sales, which comprised the bulk of revenues, improved 6 percent to P2.05 billion and franchise income rose 40 percent to P91.93 million from P65.54 million.
Robert Trota, MGI president and chief executive officer, said the company is on track with its P500-million expansion plan of opening a total of 80 to 90 stores this year, including nine stores abroad, which consist of 66 percent company-owned and 34 percent franchised outlets.
He said 10 out of the 80 to 90 target stores opened in the first three months and the others in the latter part of the year.
The 10 stores that opened as of end-March included three international stores — Max’s restaurants at Al Ain, United Arab Emirates; Scarborough in Ontario, Canada; and Pancake House in Kuala Lumpur, Trota said.
He said, as of end-April, MGI have 543 branches but it closed down seven under-performing branches.
Out of the P500 million capex for expansion this year, Trota said MGI used “a third to half” of the 2015 budget in the first quarter to give way to more store openings in the latter part of the year.
“We remain confident in our plans to broaden our international footprint by positioning some of our brands as mainstream products in new markets,” Trota said.
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 and Jamba Juice.
Fuentebella said MGI’s “first and only” hotel called Merati will be “opened within the latter part of the year” after two years of development. Merati is located beside the group’s flagship Max’s restaurant outlet in Quezon City.
The company invested P200 million in the 62-room hotel—which is excluded in programmed capex – and it will have 30 to 200-seating function rooms, which will cater to its customers in the area.
Asked if the company will expand in the hotels business, Fuentebella said the group will focus in improving and expanding store sales and branches.