Pancake House triples income on strong sales

by Zinnia B. Dela Peña, The Philippine Star

Posted at May 19 2012 09:02 AM | Updated as of May 21 2012 01:20 AM

MANILA, Philippines - Lorenzo-owned Pancake House Inc. tripled its first quarter net earnings to P32.74 million from P10.84 million a year ago, mainly driven by strong sales of its flagship brand Pancake House as well as new acquisition Yellow Cab.

Based on its financial report submitted to the Securities and Exchange Commission, Pancake House registered revenues of P830 million, up 87 percent, as system-wide sales hit nearly P1 billion from P552 million. The robust growth was attributed to new store openings and higher same-store sales.

Store sales went up to P353.07 million while commissary sales and franchise revenues increased 30.96 percent and 30.21 percent, respectively, due to increased number of franchisees and sustainable growth in same-store sales of franchisees.

Recurring income from operations rose 50 percent to P50 million due to the additional stores opened and increased efficiency in operations.

EBITDA (earnings before interest, taxes, depreciation and amortization) jumped 92 percent to P110 million with an increased margin of 13.2 percent from last year’s 12.9 percent as the company was able to further control all costs and expenses.

As of end-March 2012, the food conglomerate had a total of 266 stores: Pancake House (92), Dencios (17), Teriyaki Boy (33), Sizzlin Pepper Steak (18), Le Coeur de France (13), The Chicken Rice Shop (4), and Yellow Cab (89).

The acquisition of pizza chain Yellow Cab nearly doubled the group’s network of stores and translated into a broader reach, both geographically and across market demographics.

Pancake House acquired Yellow Cab in August 2011 for around P800 million.

With the full-year contribution of Yellow Cab, the group’s net earnings are forecast to grow 60 percent by yearend. System-wide sales are likewise seen to grow 47 percent to P4.7 billion on the back of new store openings.

To ensure its continued growth, the group is putting up 50 new stores to boost its network to a total of 350 by yearend. It has budgeted P160 million for its capital expenditures this year.