Mar 2016 Financial News

TGI Friday's sees profit again

Mar 02, 2016

TGI Friday’s in Kingston returned to profitability in 2015 after racking up over $40 million in losses during the prior two years.

The restaurant, which is owned by Trinidad-based Prestige Holdings, has been experiencing declining sales since it peaked at around $1.5 billion in 2012 due to a trough economic climate, which has also made it challenging for the franchisee to realise a profit.

“Our TGI Friday’s restaurant in Jamaica, while still facing some challenges, delivered an improved performance and returned to profitability,” in its audited financial statements for the year ended November 30, 2015.

The company posted TT$1.5 million ($26 million) post-tax loss in 2014, following a TT$1 million ($16 million) loss in 2013, although the worsened loss position was due to a tax charge that included reversal of a previously recognised deferred tax asset totalling TT$0.8 million. In 2012, the company posted TT$800,000 ($10 million) in profit following four years of incremental gains to the bottom line.

After setting up the restaurant in Kingston in 2004, Prestige had been primarily focused on marketing initiatives up to 2009, when the company shifted its attention to improving efficiencies.

Operations were only marginally disrupted in 2010 by civil unrest, as the Trinidadian company described events during and after a joint police and military operations in the West Kingston community of Tivoli Gardens left 73 civilians and one security force officer dead.

But supply chain issues and rising food cost emerged in 2011 and persisted through to 2014.

At the same time, a 29 per cent depreciation of the Jamaican dollar over the three years to 2014 also dragged on the restaurant’s operations, which rely heavily on imported food. The currency depreciated by a further 5.2 per cent last year.

Prestige saw its net profit for its 112 restaurants, which include KFCs, Pizza Huts, Subways and Fridays in Trinidad, rise from TT$50 million in the year to November 30, 2014, to TT$59.5 million in the corresponding period last year. Revenue climbed from TT$922 million to TT$963 million

Source:
camilo.thame@gleanerjm.com
Jamaica Gleaner
Wednesday March 2, 2016

http://jamaica-gleaner.com/article/business/20160302/tgi-fridays-sees-profit-again