MAX’S Group, Inc. (MGI) reported flat earnings growth for 2018 as the company felt the impact of the higher inflationary environment.
In a statement issued Wednesday, the listed casual dining restaurant said net income stood at P631 million last year, compared to P626 million in 2017.
This came amid an eight percent increase in system-wide sales to P18.80 billion, supported by a four percent growth in same-store sales. Revenues accordingly jumped eight percent to P13.68 billion.
The opening of 24 company-owned branches prompted an eight percent increase in restaurant sales to P11.30 billion, while franchising income firmed up six percent to P820.4 million.
“Our results continue to show progress as we focus on our consumers and operate in the most cost-efficient way. Despite a rising inflationary environment, we managed to improve our profitability level,” MGI Chief Operating Officer Ariel P. Fermin said in a statement.
Earnings before interest, taxation, depreciation, and amortization climbed 28% to P1.58 billion, which the company attributed to a “more profitable mix of products and operational efficiencies in both stores and commissaries.”
“Combined, these efforts resulted in higher flow-through profit,” the company said.
MGI ended 2018 with a total of 705 outlets, following the opening of 66 new stores during the year. Eleven of these stores are located abroad.
The company announced last year that it looks to ramp up its franchising system to facilitate its expansion in the following years. It targets to have a 65% to 35% mix of franchised versus company-owned stores by 2020 to reach its goal of having 1,000 outlets by then.
Alongside its plan to have more franchised stores, MGI also said it wants to explore more untapped markets in Visayas and Mindanao, following the expansion of more mall developers into the provinces.
MGI’s brands include Max’s Restaurant, Pancake House, Yellow Cab Pizza, Krispy Kreme, Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s, Meranti, Sizzlin’ Steak, Maple, Kabisera, Le Coeur de France, and Singkit.
The company said it is confident that the economy’s strength will continue to support its business moving forward.
“We are entering 2019 with guarded optimism with inflation starting to ease and election-related spending coming into play. Coupled with our business building programs, we hope this positive momentum will continue throughout the year,” MGI President and Chief Executive Officer Robert F. Trota said in a statement.
Shares in MGI jumped 3.34% or 40 centavos to close at P12.36 each at the stock exchange on Wednesday. — Arra B. Francia
