Max’s Group Reports P313M Net Income for 9 Months 2015

MANILA – Max’s Group, Inc. (MGI) posts net income of P313.12 million for the first nine months of 2015, from a loss of P31.36M for the same period last year.

“The results are reflective of the historical seasonality effect during this time of the year. Nevertheless, we are poised to generate momentum ushering into the Christmas period,” stated Robert F. Trota, President and CEO of MGI.

The Company disclosed its nine months earnings on Tuesday, which pertains to the results of operations of Max’s Entities and Pancake House Group from January to September 2015.

As of end-September, Max’s Group consolidated revenues rose 170% to P7.30 billion versus reported figures for the same period last year. On a pro-forma basis, topline growth was 6% in spite of delayed openings and planned closures of underperforming stores, which forms part of the Company’s on-going rationalization program. MGI is expected to benefit from a streamlined store network allowing it to maximize returns and resources.

“There were unforeseen delays encountered for with our store openings but nonetheless we are geared to accelerate our pace in the remaining months. We are looking to add around 50-60 new stores by December with full year revenue potential expected to be realized in 2016,” Trota said.

EBITDA increased 90% to P988.74 million for the nine months ended 2015 versus P521.27 million for the same period last year. Excluding non-recurring costs, normalized earnings stood at P339.97 million as of September 2015.

“Our EBITDA level reaffirms the strength of our core business as we reinforce our platform for growth,” Trota added.

On support, continuous implementation of category management in the sourcing of raw materials has translated to a 1.7% margin improvement on food costs. Moreover, the initial rollout of an upgraded enterprise resource-planning platform aimed at standardizing systems and processes is likewise underway. This initiative is seen to extract additional synergies and efficiencies from support operations.

Store sales, which comprised bulk of revenues, grew 6% to P6.20 billion from P5.87 billion for the first nine months of 2014. Franchise income went up 41% to P287.05 million as of September 2015 from P204.13 million versus the same period last year. Commissary sales rose 3% to P813.59 million year-on-year.

From July to September, the Company opened 15 restaurants both locally and overseas. Newly launched outlets include Max’s Restaurant in NAIA Terminal 3, UP Town Center and E. Rodriguez Avenue Quezon City, Krispy Kreme in SM Calamba and SM Lipa, Yellow Cab in Sta. Lucia Mall and Kidzania Taguig and Pancake House in Bonifacio Stopover. It also unveiled its 19th Max’s Restaurant overseas located in Al Ghurair, United Arab Emirates. Max’s Group currently operates a network composed of 547 stores.

Reaching out to new territories

“We have signed four development agreements with reputable international partners this year for 15 Yellow Cab stores in Saudi Arabia within 10 years, 10 Yellow Cab and 8 Pancake House restaurants in United Arab Emirates within 5 years and 10 Sizzlin’ Steak outlets in Vietnam within 5 years,” Trota remarked.

Dividend policy

Max’s Group, Inc. announced a dividend policy of at least 20% of prior year’s net income to be settled within a 30-day period from the declaration date of such dividends.

“We recognize the need to balance growth and shareholder interest in the long-term,” Trota closed.