Johannesburg - Taste Holdings on Tuesday reported a rise in diluted headline earnings per share to 7.9c for the
year ended February 2008 from 6.2c before.
In line with the company's growth strategy, no dividend was declared for the year.
Revenue grew 15% to R33.8m, while headline earnings were up 28%
to R10m.
Taste is a South African-based management group that is invested in a portfolio of mostly franchised quick-service restaurant and retail brands, currently through its Maxi's and Scooters Pizza brands.
The company said despite generally challenging trading conditions, particularly in the second half, headline earnings for the second half of the year were 38% higher than for the first half, due to the better than expected performance of Maxi's, and opening more stores in the latter half of the year.
System-wide sales for the group increased 21% for the 2008 year to R373m, while new stores increased 9.5% for the 2008 year, bringing the total number of outlets of Taste to 161 at year end.
The group said Scooters Pizza continued to grow its national footprint ending the year with 115 outlets. It introduced a store format with lower set up costs in the second half of the year, improving franchisees return on investment as well as reducing the amount of borrowings for new franchisees.
Maxi's underwent an extensive revamp during 2006, culminating in the opening of the new "Life" image store in April 2007 in Cape Town. All subsequent stores have opened in this image and have performed above expectations, as have existing stores revamped into this imagery.
Looking ahead, the company said despite the challenging trading conditions created by lower consumer spending due to higher interest rates and high input cost inflation, Taste's brands are relatively well positioned to continue to offer consumers value and to see the cycle through.
Not owning its manufacturing has proved beneficial in this climate, as Taste is able to source from various suppliers, thereby limiting its input costs relative to competitors, and remaining able to maintain the brands' strong value propositions.
Both of Taste's brands have the highest number of prepaid franchise fees for new stores in the last 12 months' history, which is promising in respect of new store openings for the coming year.
The addition of the BJ's stores to be converted during the year, as well as further sites within the Caltex sites on highways, will see the Maxi's brand making significant gains in system size by the end of the year.
Consumers will continue to be time starved and will continue to seek value-for-money meal solutions that are convenient. Both Scooters Pizza and Maxi's have consumer propositions that fulfill these needs, it said.
Subsequent to year-end, Taste has, subject to certain conditions precedent, acquired NWJ Holdings, a predominantly franchised chain of highly branded outlets that retails a wide range of quality jewellery and watches.
It has 70 NWJ outlets situated in major shopping centres around South Africa.
The acquisition, once unconditional, will be earnings enhancing for the group.
"This acquisition will provide a further catalyst for growth beyond Taste's two current brands and positions the NWJ brand favourably to grow both organically and through acquisition in the years to come," the group said.
In addition, Maxi's has concluded a transaction with BJs Franchising and Chevron South Africa to take over all BJs sites located within Caltex service station forecourts along the national highways within South Africa.
- I-Net Bridge