Profit drops 15% at Prestige

Profit after tax fell by a moderate 4 percent at the Trinidad based Prestige Holdings, for the first half 2016, to reach $23 million, from $23.9 million in the previous year. That disguises a much sharper fall in profits in the second quarter, with profit falling 14.5 percent from $12.25 million in 2015, to $10.7 million, from revenues that increased by a mere 1.6 percent to $240 million for the quarter to May 2016 while group revenue increased 2 percent to $478 million for the six months.
Gross profit hardly grew as is the case with sales, moving from $169 million in the 2015 six months period to $171 million in 2016 and in the May quarter, from $84.4 million to $84.7 million. Administrative expenses moved to $36.4 million from $32.2 million for the year to date and from $15.75 million in the May 2015 quarter, to $17.67 million, for 2016, but other operating restaurants expenses moved to $100 million from $99.9 million in 2015 six months period, while that for the May quarter, was up $1 million to $51.25 million.
Earnings per share ended at 37 cents, for the half-year and 17 cents for the latest quarter. Full year’s earnings should end at around 90 cents per share, the new restaurant being opened could change the end results.
“These results were generated from an average number of 113 restaurants. Performance in the 2nd Quarter was mixed with our KFC and Pizza Hut brands showing greater resilience to the economic headwinds, foreign exchange challenges and a persistently difficult labour environment; and our TGI Fridays and SUBWAY brands less so. Despite these macro-economic factors, we recognize that there are opportunities for improving the performance of these brands and we are focused on doing so,” Christian Mouttet, Chairman of the company reported to shareholders in the commentary accompanying the quarterly report.
The Six results came against the background of a sluggish Trinidad economy, but the future could be spiced with expansion plans.
“At the end of the quarter, we opened a new Pizza Hut restaurant at South Park in San Fernando, which has been well received. We expect to open our first Starbucks restaurant by the end of the 3rd Quarter and another two restaurants by the end of the financial year. Significant work is underway for the establishment of this brand in the Trinidad and Tobago market,” the report by the company to shareholder also stated.
The stock traded at $10.90 on the Trinidad & Tobago Stock Exchange on Friday at a PE of 12, based on this year’s projected earnings.