Burger King’s losses have widened, laments Grand Parade
The company says the past year has been challenging, especially its food businesses, which have been affected by tough economic conditions
Grand Parade Investments (GPI), the Southern African representative of Burger King, said the American fast-food chain’s headline loss in the local market widened by 66% to R9.5m in the six months ended December.
Despite its revenues increasing by more than a third, Burger King’s loss grew partly because of some underperforming restaurants, GPI said.
“Many of these restaurants have come to an end of their rental terms and it is the group’s intention to either renegotiate better rental terms or to relocate these restaurants in order to improve performance,” GPI said.
While Burger King added only three outlets on a net basis in the period, management planned to grow the restaurant count by 15 stores a year over the next three years.
The chain would focus on “drive-thru restaurants as opposed to in-line and or food court restaurants”.
Grand Parade Investments’ Acting CEO Moshin Tajbhai spoke with Business Day TV about the company’s performance.
GPI said on Monday its total headline earnings from continuing operations rose 13% to R35.4m in the interim period.
Including the failed Dunkin’ Donuts and Baskin-Robbins brands, which GPI recently pulled the plug on, headline earnings rose 16% to R16m.
GPI is liquidating Dunkin’ Donuts and Baskin-Robbins. The group said it had talked to several potential buyers for these brands, although it received “no serious offers”.
GPI said its gaming and leisure business grew headline earnings by 15% to R74.2m.
“The last year has been challenging for GPI and, in particular, its food businesses, which have been affected by tough economic conditions,” the group said, adding that it managed to “weather the storm”.
GPI said it would not pay an interim dividend.