Max's Group banks on election spending to turn bottom line in the black

Max's Group Inc., the restaurant chain that started out as a house-turned-fried-chicken-place, expects to book positive net income this year, mainly from election spending, company officials said on Monday.

 

In a briefing in Makati City, CFO Dave Fuentebella told reporters the company incurred P56 million in consolidated net loss last year due to one-time costs and extraordinary expenses with the acquisition of rival Pancake House.

 

Max's Group bought Pancake House for P3.49 billion in February last year.

 

"These are what we consider one-offs. We don't see this to happen this year and the years to come," Fuentebella said.

 

Expenditures last year included marketing costs, doubtful accounts receivables write-offs, one-off fees, and expenses for kitchen upgrades, repairs and maintenance, and the renovation of new and key branches of restaurant brands Dencio’s, Pancake House, and Teriyaki Boy.

 

"We focused on investments in restaurant operations and on revamping key brands, which has always been our strategy for long-term growth,” Fuentebella said. 

 

A core net income of P154.1 million, excluding one-time costs, were realized on pro-forma revenues of P9.55 billion, according to the company.

 

In the absence of the acquisition and integration costs this year, and with the help of pre-election spending,  Max's Group will be able to make a turn around, president and CEO Robert Trota told reporters in the same briefing.

 

"I think the one-off costs... That's all gone. This year, we're running as a whole, integrated company," he said.

 

"This is also anticipating a banner year, because one year before election is usually a very good year for the restaurant business," he added. "There's a lot of spending. Consumer spending is there, and we are well-positioned to service those needs."

 

The company has hit internal targets so far this year.

 

"The first few months have been on track, of our targets. But I can't really provide the exact numbers since first quarter numbers will be ready by early May," Trota said.

 

"But the first three months have shown very good results. March is also a big month for food businesses because of graduation," he noted.

 

To ride on the spike in consumer spending, Max’s Group will roll out 80 to 90 stores across its brands both locally and internationally, with more than half already backed by signed agreements and firm locations. – VS, GMA News