Picture: TASTE HOLDINGS
Picture: TASTE HOLDINGS

Taste Holdings, which is shifting its focus from fast foods to luxury goods, says Domino’s International is financially supporting its bid to sell the SA franchise of the pizza chain.

Domino’s is the last remaining food business of Taste, whose share price has plunged to 3c from a high of R5.25 in July 2015.

Taste said in November it was unable to expand its network of chains sufficiently to reach its profit targets and intends to sell its fast-foods businesses. It has since sold its Starbucks licence for R7m, as well as Maxi’s and The Fish & Chips Co, but did not disclose the buyers or prices.

The group said it continued to seek buyers for Domino’s and was getting financial support from Domino’s International.

Shift to luxury

It said it had received loans from two shareholders of R14m to support its strategic shift to luxury goods.

Taste CEO Duncan Crosson said there was interest from overseas parties in buying Dominoes. One foreign company had done due diligence. Dominoes executives were meeting this interested party this week, said Crosson.

Taste intends becoming a luxury retail group consisting of NWJ, Arthur Kaplan and World’s Finest Watches. Crosson said Taste would survive as a jewellery business.

Taste tried to sell its struggling jewellery brands in 2017 but failed to find a buyer.

Anthony Clark, analyst at Small Talk Daily, said at 3c a share in a constrained economy, Taste is on its last legs.

But Crosson disagrees. “There is still a business, no doubt.”

He admitted the past two years had been “horrendous”.

Crosson, who has worked in the jewellery division for 12 years, said Taste had closed non-performing jewellery stores and would continue to grow. “I am well versed in what we should do,” he said, adding that there are opportunities for 42 more stores.

Taste’s revenue for the six months to August fell 10% to R421m, with revenue in its food division falling 18% to R204m.

Revenue at its luxury goods division fell 2% to R217m, with the group reporting a loss for the period of R85.5m from a loss of R74.1m previously.

The company’s loss exceeded its R66m market capitalisation, which made its current listing questionable, said Vestact analyst Michael Treherne. There was a possibility that it may be bought out and delisted, though even this was uncertain, he said.

“Now that some of the fast-food assets have been sold, they are mostly left with the jewellery assets, which no-one wanted to buy a few years ago,” said Treherne.

Taste’s share price was unchanged at 3c on Friday, having fallen 70% so far in 2019.

With Katharine Child

CORRECTION: December 17 2019
An earlier version of this article stated that Taste's share price had fallen from a high of R5.25 in July, which should have read July 2015.

gernetzkyk@businesslive.co.za