Pretax losses at franchising group Taste Holdings widened to R45.5m in the six months to end-August, but the longer-term profit potential of the Starbucks coffee brand has started to percolate through since being launched in April. Taste CEO Carlo Gonzaga said the three Starbucks outlets were trading well ahead of initial company forecasts. For the four months of trading during the interim reporting period, the first two stores — Rosebank and Mall of Africa — generated combined revenues of R18m and were producing positive earnings before interest, tax, depreciation and amortisation (ebitda), Gonzaga said. The sooner Taste can pour profits from Starbucks the better, as borrowing and bank overdrafts are sitting close to R300m, with cash at about R43m. Vunani Securities small-to-midcap analyst Anthony Clark expressed concern about how much cash Taste was eating up. "They have raised R500m from shareholders in recent years, which has been spent at a rapid rate. I’m convinced they will n...
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