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Shakey’s profit up 14% amid store expansion

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SHAKEY’S PIZZA Asia Ventures, Inc. booked a double-digit growth in earnings last year, driven by robust sales, record store expansion and sustained margins against a backdrop of rising input costs.

The listed full-service restaurant operator said in a disclosure to the stock exchange on Tuesday earnings grew at an annual pace of 14% to P762 million compared to the recurring profit of P669 million in the prior year.

System-wide sales jumped 14% to P8.3 billion after increasing restaurant sales from the existing network by 5% and opening 24 new stores last year.

The store expansion last year, which surpassed the target of launching 20 new outlets, brought Shakey’s network to 208 branches at the close of 2017.

“Our strong top-line performance, underpinned by healthy same-store sales growth and record new store openings last year, demonstrates the strength of the Shakey’s brand even in a highly competitive environment,” Shakey’s President and Chief Executive Officer Vicente L. Gregorio was quoted in a statement as saying.

Total revenues climbed 17% to P7 billion last year.

In terms of profitability, Shakey’s managed to maintain industry-leading margins at the gross profit and earnings before interest, tax, depreciation and amortization (EBITDA) level of 29% and 20%, respectively, despite a challenging business environment.

“Despite higher raw material prices and the current inflationary environment, synergies realized post-acquisition of the Century Pacific Group, inventory strategies, and various operating efficiencies have supported our above-average margins and allowed us to invest in capability-enhancing initiatives,” Mr. Gregorio said.

Century Pacific Group of the Po family together with Singapore’s sovereign wealth fund acquired a majority interest in the Philippine franchise holder for American pizza chain Shakey’s in 2016.

For 2018, Shakey’s is set to open another 20 new stores in the Philippines that will jack up its nationwide store count to 228 by yearend. The company is also upgrading existing stores to enhance the dining experience and improving delivery systems to support the customers’ growing need for convenience.

Shares in Shakey’s lost two centavos or 0.14% to close at P14.38 apiece on Tuesday. — Krista Angela M. Montealegre