Taste results hard to swallow
Food-division losses were astonishing, says analyst, while margins in luxury goods division were squeezed
The market found it tough to stomach the results of the year to February of fast-food brand specialist Taste Holdings, with the share shedding 7.69% to close at R1.80 on Monday. Taste, which holds the Starbucks coffee and Domino’s Pizza brands, reported a R101m headline loss (-25c/share) from a 3% increase in core turnover to R1.1bn. Operational cash flows were negative to the tune of R100m, with operating losses increasing more than 40% to R111m. A divisional breakdown showed operating losses in Taste’s food segment bloating to R144m (previously a loss of R111m), with revenue edging up to R551m. Anthony Clark, an analyst at Vunani Securities, said that the losses in the food division were astonishing. Taste’s luxury goods division, which was recently put up for sale, increased revenue 9% to R622m. But margins were squeezed so operating profit was static at R53m. Proceeds from the sale of the luxury goods division — jewellery retailers Arthur Kaplan and NWJ — will be earmarked for r...
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