Prestige profit slips & slides

Prestige Holdings brand – TGIF

Profit at Trinidad’s fast food franchise operators, Prestige Holdings fell a sharp 35 percent to TT$7.7 million for the quarter ending in August, compared to $11.8 million for the similar period in 2017 as economic pressures continued to affect the Twin island state of Trinidad & Tobago, where the bulk of the income is generated.

The operation includes, Prestige Holdings’ of KFC, Pizza Hut, Subway and Starbucks, Weekenders Trinidad Limited (TGI Fridays Trinidad) and Prestige Restaurants Jamaica, (TGI Fridays Jamaica).
Revenues slipped in the quarter to $268 million from $273 in 2017 quarter, dragging down gross profit to $90 million versus $95 million in the 2017 period, as cost of sales remained flat at roughly $178 million in both periods.
For the nine months to August, revenues increased a mere 1 percent to $790 million and profit after tax declined 24 percent to $21 million, from $27.7 million in the previous year. For the 2017 fiscal year, the company reported $32.9 million in after tax profit, from revenues of $1.04 billion.
Earnings per share for the nine months ended at 34 cents compared to 45 cents for the same period in 2017. The results were generated from an average number of 123 restaurants, the company stated in a release with the quarterly results.
Other operating expenses were flat in the quarter but rose moderately, by just $5 million to $170 million for the nine months. Administrative expenses edged up slightly, in both the quarter and year to date period, to $20.6 million from $20 million and from $61 million to $63.7 million respectively.
According to the Chairman, Christian Mouttet in his report to shareholders, “our less than stellar performance for the nine months of 2018, as mentioned in my Half Year Report, has been driven primarily by higher costs, a still recovering local economy and consumers who are very price and value sensitive. As mentioned then, we are implementing initiatives and making changes to our operations that over time will improve our performance and strengthen our business. Additionally, we opened our tenth Pizza Hut restaurant in Princes Town on 1 October 2018.”
“We do not anticipate any significant changes in the macroeconomic environment in the short term and expect to finish the year broadly in line with the previous nine months.”
The Board approved an interim dividend of 12 cents per common share (2017 – 14 cents) to be paid on October 31.
Prestige closed the period with shareholders’ equity of $290 million, Current assets of $131 million and Current liabilities of $131 million. Non-current liabilities amounted to $54 million. The stock closed at $7.52 or a PE ratio of 17 on the Trinidad & Tobago Stock Exchange on Monday.

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