Restaurant chain Max’s Group Inc. posted a nearly flat net income of P631 million in 2018 from P626 million in 2017.
MGI said in a disclosure to the stock exchange Wednesday systemwide sales, a measure of all sales to consumers, both from company-owned and franchised stores, rose eight percent to P18.8 billion from P17.34 billion as same-store sales growth was steady at four percent.
Revenues grew eight percent to P13.68 billion from P12.66 billion a year ago, boosted by restaurant sales, which increased eight percent to P11.3 billion, after the opening of new stores.
The company rolled out 66 new stores in 2018, including 11 international branches, to bring its total network count to 705 outlets by the end of 2018. Twenty four of the 66 new stores are company-owned outlets.
Meanwhile, commissary sales increased 10 percent to P1.57 billion from P1.42 billion with a rapidly growing franchising base, while franchising income climbed six percent to P820.4 million from 776.2 million in 2017.
“Our results continue to show progress as we focus on our consumers and operate in the most cost-efficient way. Despite a rising inflationary environment, we managed to improve our profitability level,” said MGI group chief operating officer Ariel Fermin.
Earnings before interest, tax, depreciation and amortization, a measure of a company’s operating performance, improved 28 percent to P1.58 billion from P1.24 billion.
“This is a result of designing a more profitable of mix of products and operational efficiencies in both stores and commissaries. Combined, these efforts resulted in higher flow-through profit,” said MGI.
MGI earlier announced a strategic pivot toward a franchising-led approach to roll out expansion in the long-term. The move aims to capitalize on a higher recurring income stream and lighter asset deployment.
MGI is confident the prevailing macroeconomic backdrop in 2019 would remain supportive of its business.
“We are entering 2019 with guarded optimism with inflation starting to ease and election-related spending coming into play. Coupled with our business building programs, we hope this positive momentum will continue throughout the year,” said MGI president and chief executive Robert Trota
MGI currently is the largest operator in the Philippine casual dining segment with 14 restaurants in its portfolio, namely Max’s Restaurant, Pancake House, Yellow Cab Pizza, Krispy Kreme, Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s, Meranti, Sizzlin’ Steak, Maple, Kabisera, Le Coeur De France and Singkit.