Max’s Group Reports 1st Quarter 2016 Financial Results
Max’s Group Inc. (MGI, PSE: MAXS) reported a net income of P162.3 million for first quarter 2016, up 8% compared to P150.6 million for first quarter 2015. Topline growth was at 12% to P2.68 billion from P2.40 billion. Restaurant sales increased 13% to P2.32 billion from P2.05 billion driven by steady same store sales growth and new store openings for the period. Commissary sales declined 13% to P222.2 million from P255.4 million was offset by revenues from franchise, royalty and continuing license fees which grew 46% to P134.3 million versus P92.0 million, year-on-year.
“The numbers are in line with our estimates. We are now starting to realize the revenue impact of new stores that came onboard in the latter part of 2015. By recalibrating our design and build plan, we expect a leveled and systematic rollout of stores for the entire year,” said Robert F. Trota, President and CEO of Max’s Group, Inc.
From January to March 2016, Max’s Group opened 9 stores mainly across star brands Max’s Restaurant, Pancake House, Yellow Cab Pizza and Krispy Kreme. This includes 3 international outlets namely Max’s Restaurant in Qatar, Yellow Cab Pizza in United Arab Emirates and a Sizzlin’ Steak concept store in California. As of end-March 2016, MGI operates a chain of 577 stores including 37 abroad.
On to the international front, MGI has so far inked 5 development agreements for 2016. These are comprised of 25 Yellow Cab Pizza stores in China, 5 Pancake House stores in Qatar, 5 Yellow Cab Pizza stores in Singapore, 5 Yellow Cab Pizza stores in Jordan and 10 Yellow Cab Pizza stores in Egypt. This translates to a firm overseas pipeline of more than 130 outlets set to be operational in the coming years.
“We have gained a lot of traction since launching our offshore expansion program. Exposure and interest in our brands is scaling up faster than expected as we tap new territories,” stated Mr. Peter H. King, Chief Executive Officer of Max’s Group International.
To capitalize on digital opportunities, Max’s Group unveiled the Yellow Cab Pizza mobile application to provide for seamless ordering. At the moment, it has registered over twenty seven thousand installs within a span of two months, making it one of the most popular downloadable content in the food and beverage category. Other brands are currently in various stages of app development and will soon follow suit.
“We strive to keep pace with the latest market trends, at the same time allowing us to strengthen ancillary revenue channels,” explained Mr. Trota
Furthermore, the Company is on track with its full migration to an upgraded enterprise resource-planning platform. This initiative aims to consolidate support functions by optimizing systems and standardizing procedures leading to operational efficiencies and cost savings.
“For 2016, we are positive that the prevailing macroeconomic backdrop will remain favorable spurred by continuous consumer spending. We are primed to open another 60-70 stores in key strategic locations. Essentially, we have laid the groundwork to anchor our growth moving forward,” concluded Mr. Trota.