Feb 2016 Financial News

Profit growth for Prestige Holdings

Feb 25, 2016

Christian E. Mouttet, chairman of restaurant management company Prestige Holdings Limited, said the KFC and Pizza Hut brands delivered strong revenue and profit growth to the company during 2015.

In his report to shareholders on the company’s consolidated audited results for the year ended November 30, Mouttet said Prestige Holdings had a solid performance during the year which resulted in improved revenue and profitability.

“Additionally, we continued to reduce our long term borrowings and improve our working capital. Our debt/equity ratio at the end of 2015 stood at a healthy 12:88,” he said.

Mouttet said group revenue increased by four per cent to $963 million—an increase over the $922 million achieved in 2014, while profit for the year and profit attributable to shareholders increased by 18 per cent to $59.5 million, up from $50.3 million in 2014. Diluted earnings per share were 95.7 cents compared with 80.9 cents in 2014.

“After experiencing a difficult start to the year due to the impact of the new minimum wage on our costs and sales, we have been able, through strong cost management, product innovation and attractive value offerings, to deliver improved transactions and profit on operations. Our profit after tax also benefited from an improved effective tax rate.

He said while the restaurants operated by the company continue to be affected by “significant labour problems”, some progress was made during the year as a result of improved recruiting techniques and training programmes. Mouttet said he expects some improvement in labour availability this year as the economy slows due to depressed energy prices.

Mouttet said all of Prestige Holdings’ brands experienced revenue growth with the exception of TGI Friday’s. He said while revenue at the Subway outlets was marginally better than the previous year, growth and profitability did not meet expectations.

“Management is addressing the labour and operational challenges that this brand is experiencing in order to bring the customer experience and financial performance up to our expectations,” he said.

He said while he expects lower energy prices to adversely affect the T&T economy in 2016 and beyond, Prestige Holdings makes its investment decisions with the long term health of the business in mind and is positive on expectations for the year.

“We cannot expect to be immune from the effects that lower gas and oil revenues will have on our economy, but we do believe that the inevitable economic slowdown will ease the very tight labour market, which will bring operational and customer service benefits to our restaurants,” Mouttet said.

“We are also making great efforts to reduce the costs of inputs as well as devise innovative new products and value offerings to fuel growth.”

Source:
Trinidad Guardian
Thursday February 25, 2016

http://www.guardian.co.tt/business/2016-02-25/profit-growth-prestige-holdings