Prestige profit fall blamed on T&T economy

Prestige Holdings brand – TGIF

For the first half 2017 Prestige Holdings revenue increased 6 percent to TT$505 million but profit before tax decreased by 24 percent to $24.6 million, from $32.2 million in the previous year.
Profit attributed to shareholders decreased by 31 percent to $15.8 million, from $23 million the year before, as cost rose faster than income by 9.6 percent while revenue was up 6 percent.
Earnings per share were 26 cents for the 2017 half year. Gross profit margin held at 35 percent for both quarters in 2017 a 1 percentage point slippage from 2016 six months period resulting in profit for the May 2017 quarter ending at $6.7 million after tax compared to $10.6 million in 2016.
Earnings per share were 26 cents for the 2017 half year. The results were generated from an average of 119 restaurants. “The difficult economic environment in Trinidad and Tobago continues to weigh heavily on many sectors of the economy and on consumer spending. Despite this trend, across the majority of our restaurants we experienced stable or improved sales as a result of the strong market position of our brands, as well as attractive and innovative value food offerings. However, profitability fell short of prior year as a result of higher food costs and other inputs as a result of higher commodity prices, the depreciation of the Trinidad and Tobago Dollar and the higher tax rate, when compared to the corresponding period in 2016,” Christian E. Mouttet, Chairman of the company told shareholders in a written report accompanying the results.
The company indicates that they are implementing initiatives on containing cost driving sales and transactions of all our brands.
A fourth Starbucks restaurant was opened in May 2017 at Gulf City Mall in San Fernando, and the company plans to open at least one more Starbucks restaurant in this financial year.
“While we do not anticipate any improvement in the Trinidad and Tobago economy in the second half of 2017, we expect to maintain the positive sales experienced in the first half. We also expect that the initiatives to manage our higher costs coupled with new and innovative menu offerings will yield an improved performance in the second half but the full year’s performance will not likely be comparable to the prior year,” the chairman further stated in commenting on the company’s outlook.

The stock which is listed on the Trinidad and Tobago Stock Exchange, last traded at $10.64, but had no bids on Friday with an offer at $10.74 to sell 750 units.

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