Max’s Group Reports 2017 Financial Results
Max’s Group, Inc. (“MGI,” “Group” or the “Company”), the Philippines’ largest casual dining restaurant group, reported today the operating results for the full year of 2017.
“MGI maintained a strong growth momentum in 2017. Our brands ensured their relevance to today’s customers, and were undeterred in retaining their leadership positions in the casual dining segment despite the challenging market conditions encountered. We are excited to gain a stronger foothold in the consumer foodservice industry as we continue to expand our business through a renewed focus on franchising,” said Robert F. Trota, President and Chief Executive Officer of MGI.
The Company reported systemwide sales of P17.34 billion in 2017, up 13% from P15.34 billion in 2016. Topline rose 10% to P12.63 billion from P11.44 billion, and restaurant sales posted a healthy 11% increase of P10.43 billion from P 9.42 billion, driven by sustained same store sales performance and revenue contribution of new stores.
The Group’s delivery business posted a steady growth of 27% to P1.37 billion from P1.08 billion due to efforts to broaden online ordering channels and upgrade delivery infrastructure. A robust blended same store sales growth of 5% and a 13% increase in overall transaction count contributed to and sustained the Group’s market share in 2017. In addition, strengthened franchising operations contributed to the 16% increase in commissary sales of P1.46 billion from P1.26 billion.
MGI also focused on professionalizing the business in 2017, investing in key leadership positions across the organization to drive operational efficiencies moving forward. In addition, the Group institutionalized major automated systems that will be less dependent on manual intervention and will help improve workforce productivity. With these key programs, earnings before interest, taxes, depreciation and amortization (EBITDA) stood at P1.38 billion, translating to a net income of P626.69 million, up 12% compared to P561.74 million for 2016.
MGI opened a total of 78 new stores in 2017, 14 of which are located overseas. This brings the Company’s store network to 673 branches, with 55 across various cities in North America, the Middle East, and Asia.
The Company will be focusing on a franchising-led business model to drive expansion and improve accessibility to customers. With a planned roll out of 80 to 90 new outlets primarily through franchising its core brands, the Company will be able to ensure an active presence in key geographies, and at the same time, generate higher fee-based contributions to revenue.
Capital spending programmed at approximately P600 million will redeploy assets into other strategic initiatives such as a system modernization program to reinforce support services, and the construction and renovation of select flagship stores to improve the customer experience.
“Our strategies revolve around a customer-centric approach to focus on the needs of the market. And with this, we intend to build on MGI’s growth momentum as we create more value for all the stakeholders of our business. We will continue to aggressively pursue growth
prospects for our core brands and at the same time, transform our cost structure by streamlining resources and maximizing workforce productivity to improve overall profitability,” ends Ariel P. Fermin, Group Chief Operating Officer.