Grand Parade plunges into loss
The group, which is persisting with its strategy to focus on food investments, posted losses across its entire food portfolio
Grand Parade Investments (GPI) plunged into a headline loss in the year to end-June, with the food portfolio continuing to struggle as the company suffered along with South African consumers.
The headline loss per share for the review period was 4.59c, a 331% decline from headline earnings of 1.99c per share in the year-earlier period, the company said on Thursday.
Revenue of R962m was up 25% from R772m a year ago, boosted by Dunkin’ Brands and Burger King.
But the headline loss was R20.12m, more than double the previous year’s R9.28m. The entire food portfolio posted losses, with Burger King narrowing its loss to R11m from R29.9m the previous year.
Intrinsic net asset value per share rose 2.5% and gearing was reduced to 16.8% from 27.1%
"Consumer spending will continue to be strained in the short to medium term due to the impact of these [sovereign credit rating] downgrades starting to negatively affect food and fuel prices through higher inflation and import costs," GPI said in Thursday’s results statement.
Food inflation was running at double digits for most of the review period, thanks to a severe drought, and began to ease back into single digits only in April.
GPI is increasingly channelling its energies into its food operations, and last year bought the Dunkin’ Donuts brand. In 2012, the company acquired the Burger King franchise for SA.
The investment group sold a 19.9% interest in Sun Slots and 10% in SunWest as part of its strategy to reduce its exposure to gaming and leisure assets.
The company said it would persist with its strategy to grow its food business, and would "look to continue investing in food businesses via premium restaurant brands and supply chain services and product to support the restaurant brands".
By 10.05am, Grand Parade Investments had fallen 5.6% on the JSE to R2.55,