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Johannesburg - Franchise group Taste Holdings has pinned its hopes on the Christmas season, after delivering poor results for the six months to end-August. This was partly due to costs involved in the acquisition of jewellery chain NWJ Holdings in 2008.
Taste, the parent company of Scooters Pizza, Maxi's and NWJ, on Wednesday reported a 77% drop in earnings per share (Eps) to 2.4c in the period under review.
Headline Eps were also down 43% to 2.1c. This was despite a sharp rise in turnover (170%) to R85.8m and operating profit (35%) to R9m.
CEO Carlo Gonzaga said financial costs incurred in the NWJ acquisition, as well as a flat sales growth rate by the jewellery chain during the first five months of the reporting period, were to blame for the disappointing earnings numbers.
Scooters has also experienced tough trading conditions in especially the Western Cape, Gonzaga told Fin24.com.
"From the management's point of view, we are quite confident that the next six months will be better," he said. "We've already seen some improvement in September. We think December will be good. People are still going buy gifts."
Gonzaga said more than 70% of NWJ's income is generated during the festive season.
Gonzaga once again scorned criticism that Taste had lost focus by venturing into jewellery, after successfully building a fast food franchise brand.
"I would like those people to come us and see how we are doing," said Gonzaga. By Wednesday afternoon, Taste's share price had lost 4.26% to 45c/share.
- Fin24.com
