Shakey’s Pizza Delivers 40% Net Income Growth in 2016
The Philippines’ leading chained full-service restaurant, Shakey’s Pizza Asia Ventures Inc. (PSE: PIZZA), delivers a twelve-month net income of Php760 million, buoyed by stronger sales, an expanded store network, and improved profitability.
This includes net non-recurring income of Php90.3 million, a product of a change in ownership early last year and a subsequent corporate restructuring and initial public offering during the second half.
Excluding one-offs, PIZZA’s recurring net income after taxes increased by 40 percent year-on-year to Php670 million, equivalent to bottom-line margins of 11%.
System wide sales rose by 14.3% to Php7.34 billion, driven by same store sales growth of 3.9% and increased contribution of new stores.
In the last twelve months, PIZZA added an additional 17 outlets, 3 more than the 14 opened the year before, ending 2016 with a 184 Philippine store network.
Recurring revenues, including those from an in-house commissary, grew by 14.7 percent to Php6.01 billion. Late last year, a corporate restructuring took place, which included the acquisition by PIZZA of its commissary which supplies bakery products to Shakey’s as well as other food service customers.
In 2016, PIZZA also saw profitability improve as margins for recurring gross profit and earnings before interest, taxes, depreciation, and amortization (EBITDA) expanded by 820 bps to 31.0% and 320 bps to 19.7%, respectively.
The Company attributes this growth to favorable commodity prices and purchasing synergies post consolidation into the Century Pacific Group (CPG). CPG, parent company of Philippine-listed Century Pacific Food, and Singapore’s sovereign wealth fund concluded early last year a partnership to acquire majority of the pizza business from its previous owners. Since then, recurring net income margins have also expanded by 200 bps.
Mr. Vicente Gregorio, President of PIZZA, said, “Our industry leading performance is anchored on the superior value offering of Shakey’s, its strong management team, and a brand legacy that we have built over a 40 year history here.”
Shakey’s, recognized globally as the original pizza franchise, was first established in the United States in 1954 and is best known for "the pizza that started it all". In 1975, it first opened in the Philippines where it currently maintains market leadership in both the full service and pizza chain categories.
“Our success is also driven by a mission to ‘Wow the Guest’, supplemented by excellent marketing initiatives and continued product innovation, which help consistently provide guests with a memorable dining experience,” said Gregorio.
He added, “The first two months of this year have been very encouraging and we are optimistic that we will continue the strong performance into 2017.”
This year, PIZZA is looking to roll out an additional 20 new stores. It hopes to end 2017 with a 204 store network, including its first ever branch overseas.
Apart from the Philippines, PIZZA also owns the perpetual rights to the Shakey’s brand for the Middle East, Asia (excluding Japan and Malaysia), China, Australia, and Oceania. In the third quarter, it is set to open its first international store in Kuwait having just signed a development agreement with a franchisee committed to build at least 10 Shakey’s Pizza outlets in that area.
Shakey’s has been creating over 40 years of great times and great memories in the Philippines. Having started its first store in Metro Manila in 1975, Shakey’s now operates nationwide with a store count of 184 stores. Shakey’s is one of the leading operators of Fast Casual Restaurants in the Philippines, focused on family casual dining. It maintains market leadership in both the chained pizza full-service and chained full-service restaurant categories. Shakey’s believes its superior value arises from its differentiated menu offerings, high-quality products, and a mission is to consistently provide great times and great memories to every Shakey’s guest.